Exceptional loans for exceptional borrowersJoseph BadalThornburg Mortgage, Jumbo Loans, Super Jumbo Loans
A small, but savvy, group of lenders has found that targeting
super jumbo borrowers is a great way to expand their business.
Although the incidence of super jumbo loans is quite small compared
to the average mortgage loan, and the ease of closing a super jumbo
loan has historically been more difficult than closing a conforming
loan that fits into an automated underwriting system (AUS), the
rewards for funding a $1 million or larger loan are higher. Unlike
a conforming loan that fits inside a black box AUS and is readily
acceptable to a warehouse lender or the typical investor, a super
jumbo loan often needs to be tailor-made because the borrowers tend
to be highly sophisticated and have complicated financial
situations. These handcrafted loans are often not acceptable to the
usual investor or warehouse lender. But for the lender that is
willing to spend the extra time to reap the extra benefits, the
super jumbo loan category can be exceptionally lucrative.
So, how do you go about participating in this large loan arena?
First and foremost, you need to identify an investor partner that
specializes in purchasing super jumbo loans. Typically, this
investor needs to be a portfolio lender that specifically caters to
borrowers with high-dollar, complex financial needs. The investor
needs to follow a policy of crafting personalized loan solutions
for borrowers who use mortgages as financial planning tools.
Additionally, the investor should apply a commonsense approach
to underwriting a loan and not be a slave to a black box AUS.
Sophisticated borrowers needs dont fit inside an AUS. They are
often self-employed and have a large part of their net worth tied
up in their companies. Alternately, the largest part of their
income may come from bonuses and profit sharing, rather than
salary. Their credit scores might be suppressed because they have
loans on a large number of real estate properties.
The super jumbo investor needs to be flexible, and the right
investor partner can revolutionize the quality and size of your
Joseph Badal is the CEO and chief lending officer of Santa
Fe, N.M.-based residential mortgage lender Thornburg Mortgage. He
may be reached at (888) 898-8698 or e-mail [email protected]