Each week, HousingWire interviews financial services experts who can help make sense of the latest headlines, sponsored by our partners at Blend.
This week, Tom Hutchens, the EVP of production at Angel Oak Mortgage Solutions, explains to listeners the role of Non-QM lending and what the expiration of the QM Patch could mean for the housing industry. Additionally, Hutchens discusses the nation’s homebuying confidence, which climbed to new heights in July.
Here’s more detail on the topics of discussion this week:
The QM patch is a rule that permits government-sponsored enterprises Fannie Mae and Freddie Mac to avoid stricter mortgage underwriting requirements. Through the patch, GSE-backed loans are exempt from abiding by the full scope of the Ability to Repay/Qualified Mortgage rule, which requires lenders to adequately verify a borrower’s ability to repay their mortgage in the underwriting process.
In July, the Consumer Financial Protection Bureau expressed its intent to allow the rule to expire as early as 2021. The rule and its oncoming expiration have sparked widespread debate throughout the industry as some lenders claim it has shifted an increasing market share toward the GSEs.
Last week, Fannie Mae’s Home Purchase Sentiment Index indicated that America’s housing confidence peaked to its highest level as it rose to 93.7 points in July. Fannie Mae’s Senior Vice President and Chief Economist Doug Duncan said despite ongoing housing supply and affordability challenges, the HPSI reached a new high thanks to strong job confidence and favorable mortgage rate expectations.
And here are links to the articles discussed:
1) CFPB moves to kill QM patch
2) Americans have never felt better about buying a house than they do right now