Mortgages with such 'toxic' features were widely blamed for playing a major role in the housing bubble and subsequent crash.

The QM rule, sometimes known as 'ability to repay,' is intended to ensure that borrowers are not sold mortgages with features that can cause them to become unaffordable. Citibank officials have also said that bank intends to offer proprietary jumbo loans in excess of Fannie and Freddie guidelines in 2014, though it is not clear whether those will exceed QM guidelines or not. mortgages.īank of the West has also indicated that it plans to issue non-QM mortgages that it will keep on its books, with no planned cap on loan amounts. He said the move is in line with the Wells Fargo's efforts to place a greater emphasis on mortgages it will keep in its own portfolio, rather than originating with the intent of selling the loans to investors, as is done with the vast majority of U.S. Wells Fargo is assigning about 400 employees to a new underwriting group that will focus on issuing nonconforming loans, mortgages that the bank will keep on its own books rather than passing them along to entities such as Fannie Mae or Freddie Mac, according to Brad Blackwell, a senior Wells Fargo executive.īlackwell told Bloomberg News than non-QM mortgages could account for one-quarter or more of the bank's proprietary loans, or about 5 percent of all the mortgages it originates. Major lending unit established at Wells Fargo While those mortgages will likely be more costly and difficult to obtain than a QM, they'll allow borrowers to get interest-only mortgages or other loans with features not available on QMs.

Several major lenders, including Wells Fargo, are gearing up to provide private mortgages that fall outside the qualified mortgage (QM) definition. But that doesn't mean you're out of luck if you're a borrower who needs a home loan that doesn't meet those guidelines. The new federal rules for 'qualified mortgages' go into effect on Jan.

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