Are record-low interest rates masking high-cost mortgage lending?

Are record-low interest rates masking high-cost mortgage lending?

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Lending

United Wholesale Mortgage launches non-QM program for jumbo borrowers

Interest in non-QM is growing

JUMBO

United Wholesale Mortgage, one of the nation’s largest wholesale lenders, launched a new program called ‘Big & Easy Plus,’ which is design for non-QM Jumbo loans.

“There are a lot of borrowers that currently do not fit into the QM category,” says Mat Ishbia, CEO and president of UWM.   “Our Big & Easy Plus program gives UWM clients the flexibility to originate a ‘make sense’ loan for Jumbo borrowers with higher DTIs, helping expand their pipelines.”

Highlights of the program include a DTI range of 43.01-49%, loan amounts from $417,001-$1,500,000, FICOs above 740, and LTVs as high as 75%.

Investors are increasingly interested in non-QM loans.

Wells Fargo (WFC) assigned 400 underwriters to the task of originating non-QM mortgages for the bank to hold. Not all lending will be defined strictly by the qualified mortgage definition under the ability-to-repay rule.

Moody’s Investors Serviceis currently seeking commentary on its proposed approach to evaluating and rating QM versus non-QM loans for securization as residential mortgage-backed securities.

The private-label RMBS market will likely see more issuance in 2014 than 2013 – which saw $15 billion in new issues, said Kevin Duignan, global head of structured finance at Fitch Ratings.

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