- NON QM LOANS HOW TO
- NON QM LOANS VERIFICATION
They may also want to verify assets or any other information that assures them the borrower will be able to repay the loan.
Nevertheless, lenders still need to substantiate the documents provided, including income sources. Non-QM loans provide flexibility for lenders to offer mortgages to people not eligible for QM loans. However, non-QM borrows on average do have a higher DTI ratio. A study conducted in 2018 shows that the differences in credit score and loan-to-value ratio between non-QM borrowers and QM borrowers are minimal. Non-QM loans don’t adhere to the standards required for QM loans, but that doesn’t mean they are low-quality loans.
How Do Lenders Verify Income for Non-QM Loans?
NON QM LOANS VERIFICATION
Blemish on FICO credit due to unforeseen circumstancesĪ non-qualified mortgage doesn’t conform to the consumer protection provisions of the Dodd-Frank Act.įor example, if you have a DTI of more than 43% or have erratic income and don’t meet the income verification requirements set out in the Dodd-Frank Act or by most lenders, you are not eligible for a qualified mortgage and may be offered a non-qualified mortgage instead. COVID-19 halted the boom of non-QM due to the liquidity constraint, however, it regained its market share and finished 2021 with 25 billion worth of originations and is anticipated to double in 2022.Ī loan which has any one of the criteria below will be considered non-QM: The non-QM market is emerging as a lucrative and practical solution for many. To learn more about how Angel Oak is poised to help loan officers succeed in this difficult environment, visit margins thin out, lenders are faced with the task of reconfiguring their existing cost structures while looking for alternate revenue streams. Face to face meetings and stronger partnerships with referral partners and your account executive can help originators battle through a challenging market. Sometimes a complex market calls for a return to simple solutions. This seamless process is one reason why many originators have worked with us for many years. We tell you upfront if we can do a loan, and then we get it closed. Since we are the end investor, we do not have to seek third party approval to do a loan. We have presentations, webinars, and marketing materials ready to go. We can educate originators in a number of ways in non-QM programs and help market to outside normal channels. JJ: As I have mentioned, our training that we offer could be very beneficial. HW: How is Angel Oak poised to help loan officers succeed in this difficult environment? Invite your Angel Oak account executive to join you to start the conversation about non-QM. Arrange meetings, go to networking events, host networking events and develop more referral relationships. For some, that means getting out of their comfort zone. Not in droves like in 2021, but the business is out there. However, people are still buying homes and homeowners are getting cash-out refis. JJ : The biggest challenge is the decrease in originations, mainly because of a major decline in the refinance market. HW: What are some of the foreseeable challenges in the second half and how can they overcome them? It’s full-circle customer service that results in commissions and referrals. It brings something of value to Realtors, CPAs, attorneys, wealth advisors that they can then pass on to their clients. 
One great idea is setting up meetings and having an experienced account executive in non-QM present as the expert on their behalf. We have trained originators on non-QM while they closed their first non-QM loan.
NON QM LOANS HOW TO
We have been out educating the mortgage industry on what non-QM is and how to utilize it since we were founded. Loan officers should know they do not have to be an expert on non-QM. They can help with how to market outside of normal channels. JJ: A conversation with an Angel Oak account executive is a good place to start. HW: What strategies can loan officers employ to win with non-QM in the second half of 2022? This is why we can confidently tell loan officers that non-QM is how they can protect their volume and referral base in times of volatility. There is not a credit issue in the market right now that is causing volatility – non-QM loans are good performing loans issued to credit-worthy borrowers. The bottom line though is the fact that non-QM is not going away because there will always be non-QM borrowers such as self-employed and real estate investors who don’t qualify under Agency guidelines. We were founded during a time of volatility and our business model has set us up to survive challenging times since. Our company was born out of the financial crisis to provide non-QM loan solutions for underserved borrowers such as self-employed. Angel Oak has been in the non-QM space now for many years. John Jeanmonod: The key to being successful with non-QM is choosing the right non-QM lender.
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