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When It Comes To Non-QM Loans, Focus On Relationships, Not Rates

There has been a seismic shift in the mortgage industry, and it has redefined how mortgage originators must approach the new market, as mortgage rates have more than doubled from their 2022 lows. Over the past few years, 90% of new business has come from refinances, but the landscape has flipped, and we are in a purchase product-driven market, forcing the entire industry to be agile and adjust to a new normal.

In a rising rate environment, we often see the industry hone in on the ultra-competitive business of trying to get the lowest rate possible. While this may work in the agency space, the low number of borrowers in the market means many originators are stuck with navigating half, or less than half, of the volume they were doing last year. Because of this, more and more originators are turning to the non-qualified mortgage (non-QM) sector to grow their pipeline and revenue.

The challenge is that the rate-chasing game doesn’t apply in the non-QM space. Rather, relationships and referrals are the keys to success. In order to foster these relationships and better serve borrowers, originators must work with trusted lenders with expertise in this niche sector.

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