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Who Needs Non-QM Lending?

Tom Hutchens
Jun 21, 2017

When mortgage lenders ask, “Why should we implement a non-QM lending program,” I offer one simple response–$100 billion. That is the potential annual volume of the non-QM market. Given the current size of this market is less than $3 billion per year, it is easy to understand why so many lenders are racing to join in the growth of non-QM lending.
However, I have found that the question many lenders are actually asking is, “What kind of borrowers will I attract to my business with non-QM lending?” The answer to that question is also simple–creditworthy borrowers who do not fit the tight lending standards of today’s agency loan market. The number of borrowers who fit that profile is huge. In fact, according to the Mortgage Bankers Association (MBA), currently seven million potential homebuyers are unaware that they are able to qualify for a mortgage.
Take, for example, a borrower who has had a past foreclosure. Under agency standards, that borrower would have to wait seven years before they can obtain a mortgage. However, non-QM programs can help that borrower navigate his or her way out of the tight credit box and get a mortgage today.
Another group that is dependent on non-QM lending is the self-employed. Because these workers cannot verify their income through W-2 forms, the self-employed may be shut out of the agency market despite having good credit. With non-QM products like Angel Oak Mortgage Solutions’ Bank Statement Program, borrowers working in the “gig” economy can get approved using bank statements.
Still, others struggle to meet minimum down payment requirements or minimum FICO scores. Again, non-QM programs can help lenders close loans for these borrowers.
Smart lenders already realize that non-QM products are not just a last resort for borrowers who do not fit the agency mold. Rather, non-QM lending is an opportunity to reach new clients and grow loan volume.
The bottom line is that there are millions of potential borrowers across the country that need non-QM lending to purchase a home. Angel Oak Mortgage Solutions can help lenders identify these borrowers and start closing new loans right away. Loan officers should act as consultants to the borrower, helping them to find the best loan for their needs. Lenders who do not have access to the full range of products available cannot be true borrower consultants.
To learn how you can partner with the experts at Angel Oak Mortgage Solutions to uncover new business opportunities with non-QM lending, read their latest white paper at
Tom Hutchens is Senior Vice President of Sales and Marketing at Angel Oak Mortgage SolutionsTom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale/correspondent lender licensed in more than 35 states and operating in the non-QM space for over three years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail

This article originally appeared in the May 2017 print edition of National Mortgage Professional Magazine.

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