Servicers must watch non QM as negative outcomes grow

A dv01 report warns that non-QM loan performance is deteriorating six months after borrowers become delinquent, with negative outcomes reaching a new high versus a year ago. The analysis tracks delinquent and modified-loan outcomes over a six-month period across three asset classes, including non-QM mortgages, consumer loans, and subprime auto. For non-QM borrowers, “negative outcomes” (charge-offs or no payments since the initial event) rose 9 percentage points year over year to 42.3% from 33.3%. The share of “positive outcomes” fell to 43.2% from 51.6%. For borrowers 90+ days late, negative outcomes were 68.8%. dv01 notes that with call activity increasing, remaining pools skew toward more serious delinquency cases.