Secondary markets

The end of the qualified mortgage patch should further accelerate non-QM origination growth, but is the mortgage industry ready?

President Trump has signed the Protecting Affordable Mortgages for Veterans Act, which aims to address concerns that rules around certain VA refinances were impeding those loans' inclusion in secondary market pools.

After the government-sponsored enterprise patch expires, "near prime" loans over the 43% debt-to-income ratio should be qualified mortgages if they have compensating factors, according to the Center for Responsible Lending.

As officials prepare plans for the government-sponsored enterprises' exit from conservatorship, there's no shortage of speculation about what those plans might look like and how they might affect the mortgage industry.

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.

Prepayments tied to repeated VA loan refinancing activity have had an adverse effect on Ginnie’s mortgage securities that persists despite countermeasures. The government bond issuer is making new plans to address the impact.

With prospects for government-sponsored enterprise reform improving, players in the private residential mortgage-backed securities market are starting to think about how they could better compete against the GSEs while awaiting change.

Investors can now exchange certain existing Freddie Mac bonds for to-be-announced uniform mortgage-backed securities in preparation for the full launch of UMBS next month.

Freddie Mac exchanged existing bonds from its portfolio for mirror certificates for the first time, completing a key test that is central to the creation of a uniform mortgage-backed security.

The Federal Housing Finance Agency, by allowing Fannie Mae and Freddie Mac to split the CEO and president positions, let the companies dodge a congressionally mandated cap on executive salaries, the regulator's inspector general said.