QM rule opens opportunity for non-bank lenders

|By:, SA News Editor

"Non-QM [mortgage lending] is a huge opportunity, the largest we've seen in 30 years," says a hedge funder at the ABS conference, as reported by Housingwire's Paul Jackson.

Credit risk has always been a "moving target," says a non-bank mortgage lender, but the CFPB's qualified mortgage rule "cement(s) those lending boundaries, giving investors much more clarity on what can be done "outside the box."

"There is a huge universe of people who right now sit outside of QM and can afford this kind of lending."

Private label lenders/securitizers maybe set to benefit include Redwood Trust (RWT) and PennyMac Financial Services (PFSI +0.2%).