TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1175308
TH E M R EP O RT | 11 TAKE 5 MDWELL see privatization coming back to the market, certainly with this current administration. We see the FHFA driving private capital back into the space, so we think there's going to be abundant opportunities within that space. We've already seen it grow by about four times over the last several years. We're invested there and put a lot of time and effort into that sector. The challenge is that it's still kind of an immature space within the mortgage business. People think back to some of the loans that were being done in 2007 and 2008, and it's just not the same—non-QM is categori- cally different. Education can help overcome that perception, not only within the industry but among the public at large. M // What are some of the most common misconceptions that you encounter about non-QM? SAMPLES // People don't realize that all the major lenders are un- derwriting non-QM loans to ATR standards. The ability to repay standard is being baked into these loans, just as it is for your Fannie Mae, Freddie Mac, or Ginnie Mae loans. There is a level of under- writing thoroughness in these loans that didn't exist before. Second, the securitization market is much different today than it was back then. You are in- vested in every loan you do. You are truly invested in each loan, and you have real skin in the game if something goes sideways. There's a real sense of respon- sibility within the mortgage busi- ness today. People are trying to do things the right way. They're trying to be responsible. There's a focus on finding ways to do things more efficiently and focus- ing on the consumer, whether that's on the origination side or the servicing side. We've seen society change. People are qualifying for loans differently today than they did 20 years ago. It doesn't mean they're bad borrowers. It means that we have to find ways to serve their needs that make good common sense—we need solid underwrit- ing principles to get them into the homes that they deserve. Where to Live on an Average Salary Home prices in metros across the U.S. are growing rapidly. A new report details where homebuyers can live based on average income. T he story of the 2019 housing market so far has been the lack of affordable housing. A report by the National Association of Realtors found that prices for single-family homes increased in 91% of markets during Q2 2019. Redfin, though, recently released a poll surveying some of the most populated metros in the nation, and studying affordability based on an average salary. A family in Detroit, Michigan, can afford an average-priced home by earning just $26,690 annually, making it the most afford- able metro in the nation. Prospective homebuyers on the west coast, however, do not have such luck. Source: Redfin blog post, "In Detroit, a Family Needs to Earn $27,000 to Afford the Typical Home. In San Francisco, It's More Than $265,000." 10 Most Affordable Markets on Average U.S. Salary 1. Detroit 2. Rochester, New York 3. Dayton, Ohio 4. Buffalo, New York 5. Pittsburgh 6. St. Louis, Missouri 7. Camden, New Jersey 8. Hartford, Connecticut 9. Cleveland 10. Oklahoma City 10 Least Affordable Markets on Average U.S. Salary 1. San Francisco 2. Anaheim, California 3. San Jose, California 4. Los Angeles 5. San Diego 6. Oakland, California 7. Honolulu 8. Oxnard, California 9. Seattle 10. Boston "People don't realize that all the major lenders are underwriting Non-QM loans to ATR standards. The ability to repay standard is being baked into these loans, just as it is for your Fannie Mae, Freddie Mac, or Ginnie Mae loans. There is a level of underwriting thoroughness in these loans that didn't exist before."