Only one of two things can happen when a Loan Officer for a large financial institution is unable to qualify a bank customer for an agency loan. The Banker can either say, “Sorry, we can’t help you,” or “We don’t originate alternative loans, but I can refer you to a great company that has just the product you need.”
Because the second answer is clearly preferable, non-QM Originators will find that many traditional competitors can become great referral partners. Most major banks do not originate non-QM mortgages. At the same time, they never want to tell consumer or commercial banking customers that their business is not welcome.
A 2016 Federal Reserve study showed that around one in every eight mortgage applications (more than 10 percent) is rejected for a variety of reasons. When agency lenders must deliver bad news, they can also offer hope by recommending a reputable non-QM resource.
“The last thing you want to do is tell people their business is not good enough,” one Bank Manager told me recently. “That’s why it is important to help people even if you refer them to a rival. Otherwise, they may take their checking and credit card business someplace else, wiping out years of goodwill.”
For non-QM specialists, marketing to Bank Loan Officers can be more efficient and straightforward than targeting typical referral partners such as Real Estate Agents. Bankers are more likely to know what non-QM loans are. Plus, they are easier to canvass, as they can usually be found at their desks during “Bankers Hours.”
“If you really want to connect with the largest number of potential referrers in the shortest amount of time, just drive down the road and check in at every bank,” a successful non-QM Originator said. “Someone is usually available, and you don’t have to spend much time explaining the need and benefit.”
The five minutes you spend at each stop will be well worth the time. Just introduce yourself, ask if they have someone to whom they refer fallout business (they usually do not) and leave your contact information.
As America’s largest non-QM lender and industry pioneer, Angel Oak Mortgage Solutions offers diverse products for borrowers and tools to help Originators succeed. Your Angel Oak Mortgage Solutions Account Executive will help you identify and work with deserving borrowers who simply do not meet narrow agency lending criteria. Call (866) 837-6312 or learn more at AngelOakMS.com/MAP
Tom Hutchens is Executive Vice President, Production at Angel Oak Mortgage Solutions, an Atlanta-based wholesale and correspondent lender leading the non-QM space for four years and licensed in over 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 [email protected].
This article originally appeared in the November 2018 print edition of National Mortgage Professional Magazine.