ATR

A gradual approach would help the market absorb loans affected by the government-sponsored enterprises' expiring qualified mortgage exemption, a Redwood Trust executive told analysts during a recent earnings call.

Many in the industry say releasing GSE-backed loans from stringent underwriting rules has helped the housing market recover, but a new level of regulatory burden could reverse those gains.

Fannie Mae's current tack could help it weather some of the new challenges confronting the government-sponsored enterprises, including the planned expiration of its qualified mortgage rule exemption and rate-driven earnings volatility.

The mortgage industry was caught off guard by regulators’ decision to cease special treatment for Fannie Mae and Freddie Mac in complying with underwriting rules. But how big of an impact will the new policy have?

Alternative investment manager Pretium plans to buy Deephaven, a residential mortgage-backed securities issuer that operates outside the qualified mortgage market, from Varde Partners.

The nonconforming market is ready to absorb most of the government-sponsored enterprise loans covered by the QM patch, but not all of them, according Redwood Trust.

Securitized loans originated outside the Qualified-Mortgage rule's parameters have looser underwriting guidelines than mainstream loans do today, but are more tightly underwritten than past subprime or alternative-A products, according to DBRS.

As 30-year fixed-rate mortgages rose 30 basis points year-over-year, non-QM originations are estimated to grow 400% in 2019.

Although forecasts anticipate a continuing drop in overall originations, private-label residential mortgage-backed securitizations backed by newer loans are expected to keep increasing through next year, according to Bank of America.

Fund manager Varde Partners wants to grow its partnerships with lenders and servicers interested in selling off their excess mortgage servicing rights.