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Non-agency lender Deephaven announced new income qualification options to enable brokers and correspondents to compete for more credit-worthy borrowers who are locked out of agency mortgages, according to a press release.
The company’s new asset utilization calculations determine qualifying income based on a broad range of assets—including personally held stocks, bonds, mutual funds, vested amounts of retirement accounts and personal bank accounts.
“These options give loan officers the opportunity to fill a large market gap by providing common-sense solutions to a borrower’s challenges. For example, if borrowers have sufficient assets to meet the down payment and reserve requirements, make 60 months of monthly debt payments and pay off this mortgage, they are likely to be deserving customers,” said Shelly Griffin, senior vice president of Client Development.
Deephaven offers two alternatives for mortgage brokers and correspondent lenders including:
Total Asset Calculation — The company will offer mortgages for borrowers whose assets cover the new loan amount, down payment, closing costs, required reserves and five years of current monthly obligations. It is not necessary to disclose their employment or total income on a 1003 Form.
Debt Ratio Calculation — At minimum, borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1 million in qualified assets, both of which must be net of down payment, closing costs and required reserves. Monthly income is calculated by dividing net qualified assets by 84 months.
This asset utilization approach is offered under Deephaven’s Expanded-Prime program only and is not available for cash-out transactions. If a portion of the assets will be used for the down payment, closing costs or reserves, Deephaven will exclude them from the balance before analyzing the full portfolio.