Speaking with leading Brokers, I can confirm that alternative lending is important to homebuyers and the marketplace. Not all originators understand non-QM products and how they can benefit their overall production. Those who do understand have found a sure-fire way to attract new customers.
Most of today’s top producing non-QM Brokers were suspicious and hesitant to offer them. When they decided to learn about these loans—for creditworthy people who did not fit in the agency mortgage box—they discovered safe, credible products that enhanced their ability to compete.
“I simply got tired of saying ‘no’ to borrowers,” said Jeff Miller, Broker of Record for California’s Truss Financial Group.
Miller explained that, after turning away too many potential customers, he began considering alternative loans. Miller said the biggest challenge was finding lenders with solid processes, those who put energy and effort into customer service.
Miller’s enthusiasm, like that of other brokers, was front and center at Angel Oak’s January National Sales Conference in Orlando. Our Account Executives told me Brokers are convinced that non-QM is here to stay.
According to Dominic Bologna, Charlotte, N.C., Branch Manager for New Penn Financial, “This (non-QM lending) is a great space to be in right now. As word gets out that you can structure loans that others cannot, you get more opportunities.”
He said the business grows without doing too much because many people cannot qualify for conventional loans.
“When you offer services that your competitors can’t, you have an advantage,” said Bologna.
Brokers tell us they can easily close non-QM loans within 15-30 days when working with credible non-QM lenders. Once you know what kinds of upfront documentation they need, closing non-QM loans is straightforward.
“It’s absolutely the same,” said Carolyn Frey of Mortgage Lending Solutions with offices in Florida and Ohio. “We gather the same verifications of income and credit. The sets of information are different, but once you get everything, take the application and find the right loan, non-QM loans work the same as conventional loans.”
Top producing non-QM brokers say two approaches are essential. First, make sure you pay attention to detail upfront. Because different non-QM loans require specific documentation, getting the application right is essential. Second, make sure your lender has a top-notch customer service team and a record of closing most loans within 30 days.
“Every loan has a story to tell,” said Emilio Soli, a Director at Walton Funding. “The ones by my non-QM loans are overwhelmingly positive.”
Tom Hutchens is Senior Vice President of Sales and Marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale and correspondent lender leading the non-QM space for four years and licensed in more than 35 states. 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 Info@AngelOakMS.com.
This article originally appeared in the February 2018 print edition of National Mortgage Professional Magazine.