TheMReport — News and strategies for the evolving mortgage marketplace.
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Th e M Rep o RT | 19 cover story For The Next Generation of Leaders Ready 43 rd Annual Western Secondary Market Conference July 8-10, 2015 | Westin St. Francis | San Francisco www.CMBA.com confidence is back, Date is laying the groundwork to eventually feed a more robust private-label RMBS channel, but he admits the market is still in the building out phase. "I think it has taken consider- ably longer than anyone would have wanted, in part because Congress has chosen not to move forward with GSE reform," Date explained. "The reality is, absent a robust private-label mar- ket there is no particular reason to believe nonagency originations by nonbanks will scale." Robert Hirt, CEO of mortgage lender RPM Mortgage, Inc., agrees. The chief executive says the government-sponsored enterprises still own a majority of overall originations. However, private-label investors—whether in securities or whole loans—are looking more favorably on the market, according to Hirt. "Because the consumer has re- balanced his balance sheet, he has more liquidity and there is home appreciation," Hirt explained. In turn, this is making private-label investors a bit more confident. "The banks at one point owned the market around jumbo," added Hirt. "They are getting a fair amount of competition from private investors who are hoping to hold the product for now until the securization channel opens up." Who Benefits from the Reemergence of Less Traditional Lending? W hether lenders outside the big banks decide to focus on agency or non-agency loans, ei- ther way the consumer ultimately benefits from having more lenders in this space, analysts claim. "I think all constituencies are going to benefit from it," said Hirt with RPM. The ultimate benefi- ciaries will be borrowers who fall outside the QM-lending criteria even though they are credible and safe credit risks, he explained. Date with Ethos Lending and Fenway Summer says his product offerings will include loans for borrowers who are asset-heavy, income light, and those dealing with low loan-to-value ratios and high debt-to-income ratios. This type of product innova- tion is what sets nonbank firms apart from larger, institutional competitors. And while nonbank lenders continue to pick up the slack in originations, the real impact will not be felt until a robust second- ary-market backed by investor confidence is up and running. Kerri PanchuK is an attorney and financial writer with more than a decade of experience covering real estate, default servicing, residential mortgage-backed securities, retail, macroeconomics, and commercial real estate. Panchuk graduated from the Southern Methodist University Dedman School of Law and Texas Tech University. Panchuk previously served DSNews.com as online managing editor/producer and webcast anchor. In April, she rejoined the Five Star Institute as executive director of member groups, overseeing the development and growth of the National Appraisal Congress and Default Title Coalition. Panchuk is a member of the State Bar of Texas.