5 Reasons To Use Non-QM


If you have been keeping up with mortgage industry news then you know it is almost impossible not to know that non-QM is crushing it this year! Listen to Frank and Brian from the National Real Estate Post talking about it: https://angeloakms.com/non-qm-crushing-90-growth/. If that isn’t reason enough we will give you 5 more reasons to use non-QM products!

1. The Non-QM Market is Well Established. The products have existed for several years and their performance is well-documented. There is a lot of activity in the non-QM market. Angel Oak’s 90% growth year over year in non-QM does not equate to a wait and see segment. We set a record in volume in Q2 with a combined total of over $512 million in originations among Angel Oak Companies. The proof of progress is in our numbers.

2. Non-QM Loans Are Good, Responsible Loans Angel Oak follows the same compliance protocol as outlined in the Dodd Frank Law. This law eliminates the rules of pre-crisis mortgages. To say that non-QM is the new sub-prime is not correct. All mortgage lenders must demonstrate that their borrower has the ability to repay a loan. And the performance speaks volumes. According to FitchRatings, “Of the $4.3 billion and roughly 11,000 loans securitized since 2015 where loan-level performance data is publicly available, only 8 loans have entered foreclosure.”

3. Borrowers are Diverse Requiring Diverse Products. Angel Oak offers a range of programs and products for borrower’s unique circumstances. Think of the borrowers you have met who you know would not qualify for a conventional loan rating due to a prior credit event. There will always be different types of borrowers. Position yourself as a resource who can take care of most borrower’s loan needs.

4. Non-QM Loans Close as Quickly as Conventional Loans There is no need to shy away from non-QM loans thinking they will not close. The time and resources put into learning these new products or working through a transaction will not be wasted. Angel Oak works hard to ensure a quick and smooth process to close. We have met every challenge to provide the same consistency on non-QM products that brokers and borrowers expect from conventional financing.

5. Non-QM Changes the Negative Stigma of the “Just Missed” Borrower There are borrowers who do not think they are a good candidate for a loan due to stricter guidelines. They might have endured a credit event that they responsibly recovered from and have the ability to repay their loan. A realtor may have discouraged them telling them they might not qualify for a loan. Originators can change the conversation and help credit worthy borrowers see that they have options. Non-QM is an excellent solution to place people who can pay their mortgages into homes. This strengthens the housing market, the economy and allows those in the industry to grow their business. It is good for everyone involved.

Non-QM is not only a fall-out product. There is a huge underserved market that can benefit from non-QM loans.