As The Gig Economy Grows, So Does The Demand For Non-Agency Loans

It’s 2019, and modern day living hasn’t slowed down. As millennials are changing the game of the functionality and productivity of the average work day, the standards of living and efficiently achieving what the average worker wants and needs are at their breaking point. Depending on who you ask, there are anywhere from 15-18 million self-employed Americans today, and that figure is expected to soar in the coming years. They have managed to do well in a surging economy, sometimes in spite of having debt or a credit incident in the past.

At Angel Oak Mortgage Solutions, we have pioneered the resurgence and success of non-QM mortgages so that the average worker can now afford a home. We are the leaders in the space, and have experienced record-setting growth in non-QM over the past five years. In fact, non-QM is the only area in the mortgage industry with year-over-year gains, and Angel Oak continued to report increases in volume each quarter of 2018, catering in large part to the millennial demographic.

Another large segment of borrowers who could benefit from non-agency loans are those who are credit challenged and/or are in need of debt consolidation. “Between car loans, credit card debt, maybe even an unsecured loan that has severely dinged a borrower’s credit, they could be looking at interest rates in the 20s and 30s, even though they’ve never been late on a payment,“ Eric Morgenson, VP of Business Development said. Angel Oak uses risk-based pricing and can reduce monthly payments as long as the borrower isn’t getting more than 2% cash in hand.

We have options for most every borrower, such as the self-employed, those with a credit event, or people who are buying an investment home. They all have unique situations but one thing remains constant – they all must prove their ability to repay their loan.

In general, banks can’t do these loans, so when a borrower comes in to a bank who is self-employed, who has impaired credit, or has a recent foreclosure, they’re rejected right out of the gate. If a broker forges a relationship and gains the trust of these loan officers, though, there’s a chance that the loan officer would steer the borrower to a non-agency loan.

“We make our own rules,” Morgenson said of Angel Oak. “If the loan makes sense to you, it’s probably going to make sense to us.”

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Angel Oak Companies is an industry leader in delivering innovative mortgage credit solutions. Through our integrated platform, we deliver solutions across asset management, mortgage lending and capital markets.

Angel Oak Mortgage Solutions offers a breadth of alternative lending products to allow our clients to grow their business and better serve their customers. We re-connect qualified home buyers with the investor community to create a win/win/win for the borrower, originator and investor. As a highly entrepreneurial organization, we are able to quickly adapt to the needs of our clients and embrace a strong service-based culture.

Angel Oak Mortgage Solutions currently offers alternative correspondent mortgage lending services across Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, Nevada, North Carolina, North Dakota, Oklahoma, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

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