Breaking Down Non-QM Correspondent Lending
Ten years has passed since the housing crisis hit the economy in 2008, and Non-Qualified correspondent mortgages are finally making a comeback. Industry experts are predicting Non-QM loans could grow to $5 billion in 2018, up sharply since 2014 when the market started to recover.
These aren’t the same correspondent Non-QM loans that were partly responsible for the housing crisis. Today’s Non-QM correspondent loans were created in the wake of several regulatory measures designed to make Qualified Mortgages safer to homebuyers and to the investors that purchase mortgages on the secondary market.
After the most recent 2008 housing crisis, President Obama signed the Consumer Protection Act, and the Dodd-Frank Wall Street Reform Act to create minimum standards for mortgages, including the ‘Ability to Repay” rule and a qualified mortgage definition. As of January 10, 2014, these boundaries were adopted by the Consumer Financial Protection Bureau (CFPB) thus, providing banks and mortgage lenders with liability protection when originating QM loans. This allowed banks and mortgage lenders freedom to make more home loans with less fear of buybacks and lawsuits.
Non-QM Correspondent Mortgage Loans
A Non-Qualified Mortgage (Non-QM) is any home loan that doesn’t comply with the Consumer Financial Protection Bureau’s existing rules on Qualified Mortgages (QM). Usually this type of correspondent mortgage loan accommodates people who are not able to prove they are capable of making the mortgage payments. Just because it is a Non-QM correspondent mortgage loan does not necessarily mean high risk or subprime mortgage risk, and in many cases these correspondent mortgage loans require a high FICO score but simply do not check all the boxes associated with a correspondent QM loan. The main difference between the two types of correspondent mortgage loans is that correspondent Non-QM loans for mortgages are protected by the lender against any type of lawsuit should you become unable to afford the mortgage loan. Typically, individuals experiencing one or more of the following may qualify for this alternative:
- High debt ratio
- Blemish on FICO credit to unforeseen circumstances
- Self-employed for less than two years
- Low income on tax returns
To see if your clients might qualify for our correspondent mortgage lending products or have any of your questions answered, click here.
Angel Oak Mortgage Solutions Can Help
There are a handful of lenders who will put together tailored packages for both high- and low-FICO individuals to help them achieve the goal of home ownership, but Angel Oak Mortgage Solutions stands out by being the #1 Non-QM lender in the nation as of 2017. We offer correspondent alternative mortgage lending programs to help your borrowers who may not meet general agency financing guidelines. With our guidance, you’ll be able to expand your product offering and grow your business with our tailored programs. Alternative correspondent mortgage lending programs have proven to be increasingly popular over the last few years. With first time home buyers being more internet-savvy than ever, they can easily compare different alternative lending products with the click of a mouse.
Angel Oak Mortgage Solutions offers a technology platform that allows for paperless submission and the ability to track loan status with the click of a button. Our streamlined operations encourage quick response times, allowing for dependable communication and decision-making.
We offer a number of alternative mortgage lending programs geared toward correspondent mortgage lenders.
Learn more about our alternative correspondent mortgage lending programs here, or download our correspondent package to get started in working with Angel Oak Mortgage Solutions.
About Angel Oak Mortgage Solutions
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, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, Nevada, North Carolina, Oklahoma, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.