Mortgages

The deal appears to take advantage of a shift in federal rules reducing the level of non-owner-occupied loans Fannie Mae and Freddie Mac can purchase.

Sales of new U.S. homes rose in July for the first time in four months, helped in part by additional inventory and indicating still-firm underlying demand.

The overall pace of both entries and exits slowed, even as the private-label securities and portfolio loan segment saw a spike in its numbers.

Refinancing, high home prices, the concentration of pandemic-related hardships in the FHA market, and the lingering impact of last year’s market disruption all likely played a role in the intensified discrepancy.

The collateral mortgage were underwritten through the CFPB's ATR rules, and captures self-employed, prime and super prime borrowers, and even foreign nationals.

Marked declines in loans that have had relatively higher levels of pandemic-related distress reinforced other indicators suggesting the market could normalize if infection rates remain contained.

Meanwhile, investors await word from the central bank regarding monetary policy, as limited housing supply continues to drive prices upward.

But 45% of the top 100 counties still have an above-average likelihood that borrowers won’t make their payments on these business-purpose loans, RealtyTrac said.

But average loan sizes remain near record highs, with summer purchases of new constructions continuing to drive up prices.

The move adds to signs that the broader restart of foreclosures won’t get fully underway until 2022.