Mortgage Lending May Get Tighter Soon

A large non-QM lender that we work with just shut down their correspondent division. Eeks! They did keep their wholesale division open. Angel Oak Mortgage one of the largest non-QM lenders last week announced that they rescinded all their rate locks and were forcing borrowers to relock their rate at today’s current much higher rate. Why, the rapid mortgage rate increases caused by the Fed’s words and lack of action on fighting inflation last year is creating liquidity problems. I fully expect this will spread to other lenders in the non-QM world. What are non-QM loans? They are primarily bank statement loans and DSCR loans for RE investors.

Second, we have been told that jumbo loan underwriting is expected to become tighter soon.