Why Use Non-QM Products

The reputation of the power of non-qualified mortgage lending across wholesale, retail, and correspondent lending channels is growing. Both borrowers and investors are realizing how top alternative mortgage financing options can provide a relatively safe and profitable channel of mutually beneficial opportunities for wholesale mortgage originators, mortgage brokers, correspondent lenders, investors and non-qualified home buyers.

Many non-QM borrowers are, by many qualifications, ready to handle a mortgage and have the ability to pay their mortgage loan products, should they receive one. In short, many non-QM borrowers simply suffer from the setup of the FICO credit scoring system and are otherwise fully qualified to obtain a mortgage loan. A full two-thirds of non-QM loan borrowers used some level of alternative or limited documentation, meaning their income, though valid and substantial, simply is not well-understood by FICO and the institutional lenders. 

Here are five 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. 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 loan originations among Angel Oak Companies.
  2. Non-QM loans are good, credible 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.
  3. Borrowers are diverse, requiring diverse products. Angel Oak offers a range of programs and products for a 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 borrowers’ 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.


Angel Oak Mortgage Solutions stands out by being the #1 non-QM lender in the nation as of last year. We offer correspondent alternative mortgage lending programs to help your borrowers who may not meet general agency financing guidelines, and with our guidance, you’ll be able to expand your product offering and grow your business with our tailored programs. We offer a number of alternative mortgage lending programs geared toward correspondent mortgage lenders.

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.



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.