GSE business in various noncore categories increased during the second quarter as lenders turned their focus to agency business. (Includes data chart.)
The REIT’s aggregation of non-agency mortgages typically dwarfs its business-purpose lending activity, but that wasn’t the case in the second quarter of 2020.
A lack of standardized reporting is causing problems for non-agency MBS investors. In one non-QM MBS, research firm dv01 found 233 loans that had been modified while the trustee reported only 41 mods.
After increasing in March, April and May, the delinquency rate on securitized non-QMs declined in June. Now servicers are grappling with forbearance plans that are expiring.
The lack of standardization in the non-agency MBS market has raised concerns about how servicers are handling loans in forbearance. Critical details regarding loan performance are missing, according to investors.
Demand for non-QMs in the secondary market is helping lenders loosen underwriting standards and drive down interest rates for new production. Five non-QM MBS hit the market in the past two weeks.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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