Do you have a pipeline that can deliver a predictable number of loans two years into the future? I will wager that the only Loan Officers who do are closing non-QM loans this year. Here is how and why only non-QM loans enable a residual income strategy for Originators that is impossible if you only handle agency loans.
I have written before about how non-QM customers are likely to deliver two mortgage originations (“One Buyer, Two Loan Deals
,” October 2018). Here now are details about exactly how to leverage your short-term non-QM success in ways agency-only Originators cannot.
Because non-QM loans enable people to buy homes who—for any number of reasons—are not eligible for lower-cost agency loans, these borrowers are eager to refinance as soon as they are eligible. That typically takes between one to two years. This interim period is when their Loan Officer must cement the refinance opportunity.
Indeed, those “nearly guaranteed” prizes will not be automatic. You must personally call your customer to make sure they are on target to refinance with you. For non-prime buyers, the Originator should know when an event comes of a credit report. Make sure you speak with them 30-60 days before so they don’t go to a competitor. You can use e-mail, but personal contact is most crucial. I recommend using a CRM tool, Google Calendar or even a manual tracking system to make the follow-up both easy and effective.
How much residual income can you predict and plan for? If you close two non-QM loans each month this year, on Jan. 1, 2020, you will have a future pipeline of 24 loans that should be executed within 24 months. If you are an agency-only Originator, can you fill your pipeline in the same way?
Regularly contacting these targeted refi prospects allows you to ask for referrals in a more diplomatic way than if you simply are calling previous customers out of the blue. You always have a reason to call: “Hi, I just want to make sure we will refinance next year. By the way, do you know anyone who might need my help?”
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 sponsored editorial originally appeared in the April 2019 print edition of National Mortgage Professional Magazine.