Impac Mortgage Holdings Inc (IMPM)

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Four Years In, Non-QM Market Struggles to Amass Volume

By Thomas Ressler
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The game-changing ability-to-repay mortgage lending rule from the Consumer Financial Protection Bureau took effect four years ago this month. At that time, regulators said there would be plenty of mortgage lending outside the parameters of the qualified-mortgage box. So far, however, that expectation has yet to be realized.
Authoritative numbers on the size of the non-QM space are difficult to come by. One clear indicator is the volume of interest-only mortgage originations, $20.2 billion during the first nine months of 2017 by 15 major lenders, according to Inside Nonconforming Markets.
And a handful of nonbanks have established a growing securitization market for a variety of non-QM loans and other expanded-credit mortgages, including a new breed of nonprime loans and products for borrowers who don?t easily fit into the agency box such as the self-employed and foreign nationals.
Suzanne Mistretta, a senior director in Fitch Ratings? residential mortgage-backed securities ratings group, told Inside Mortgage Finance this week the sector has been growing. However, ?it is still a very small percentage of total issuance,? she said. For the full analysis, see the new edition of Inside Mortgage Finance.
Other areas of interest: Originations, Regulatory, Nonconforming