The issuance of non-QM bonds, which bundle these mortgages, has risen 44% this year to $18 billion. “Non-qualified” describes any mortgages that don’t follow the Consumer Financial Protection Bureau’s 2014 rules.
“It’s obviously disturbing this late in the cycle to see originations for these loans at the kind of level they’ve kicked up to,” Daniel Alpert, managing partner at Westwood Capital, told Bloomberg. “The housing market is not quite ready for a big infusion of this product.”