Underwriting

Lenders are eliminating what they consider to be riskier loans from their offerings, the Mortgage Bankers Association said.

Payments increase 5% in each of the first five years of the mortgage, with the unpaid interest from that period added to the principal.

But the shift to a purchase market means issues around employment and income verification should concern originators.

Rate and term refinance activity has practically disappeared compared with 12 months ago, and volume for the less rate sensitive cash-out product is much lower.

Historically tight underwriting reinforced by regulation and third-party reviews could be buffers, so long as manufacturing standards for production and servicing hold up as residential mortgage companies downsize, according to KBRA.

At least one other nonbank wholesaler will be following suit, with more likely to follow.

A "Big 3" credit bureau is testing a direct data feed into a FICO score, and a top multifamily mortgage lender signed a multiyear contract with a high-profile fintech platform.

The venture-backed fintech also rolled out an option that allows the borrower to "undercollateralize" a property using the USDC stablecoin, pledged at 40% of the value.

The company is acting nearly a month earlier than its competitors did in 2021, the first shot in this year's "loan limits wars."

This product, available throughout all of the company's channels, is characterized by interest-only payments over the first 10 years of the term.