“In the government space you have some room, there’s some flexibility, but as far as getting outside of that, that’s really not what we’re focused on. We’re not going to get into non-QM programs, we’re going to stay focused on what we do, and unfortunately, it’s a retracted market, people are just sticking it out, saying they’re going to have to wait a little bit and see what happens with the market.”
The crisis is compounded by the difficulties many wholesale lenders are experiencing. Last month, Fitch downgraded the ratings for two – Provident Funding and Finance of America – just weeks after AmeriSave Wholesale Mortgage Solutions and Suburban Mortgage abruptly shut down. And they weren’t the only ones this year.
Others like Homepoint, the country’s third largest wholesale lender, have been forced to lay off staff, while Freedom Mortgage, which is ranked as one of the country’s top government-insured lenders, had its outlook revised to “negative” by Fitch recently.
Read more: Lenders’ ratings cut by Fitch
Mell acknowledged that it was an industry-wide problem, going as far as to say that the current market conditions were almost as difficult as those following the 2008 crash.