Since its inception, the qualified mortgage rule has been synonymous with loans purchased by Fannie Mae and Freddie Mac or guaranteed by government agencies. But a broader QM definition could change that by creating more competitive private-label options.
The $446 million Pearl Street Mortgage Company 2018-1 Trust is backed by 30-year, fixed-rate loans with credit characteristics in line with recent private-label prime jumbo transactions rated by Fitch Ratings.
Some commercial buildings that are not required to obtain earthquake insurance may still be susceptible to significant structural damage that could put the borrowers at risk of default, according to Kroll Bond Rating Agency.
That’s an about-face from the bank’s previous transaction, completed in October, which was backed by fixed-rate mortgages, nearly half of which were underwritten to standards for purchase by Fannie Mae or Freddie Mac.
Competition between fintech, marketplace and traditional mortgage lenders often focuses on borrower-facing automation and other technology. What gets overlooked is how differences in their funding sources create another area of competition.