Non-bank lender provides new solution for stalled deals

In a time when government scrutiny and tightened bank policies have made it increasingly difficult to get loans from mainstream lenders, non-bank lender Bluestone has stepped up.

Bluestone recently announced its entry into the near prime space, a segment in the mortgage market that consists of borrowers banks have rejected because they don’t fit mainstream lending criteria.

According to Bluestone, although these borrowers may have a fairly clean credit history, they fall outside the credit guidelines due to a number of factors, such as short-term employment, being on probation, unusual sources of income (e.g. pension or rental income), or being a self-employed person who wants to use bank statements or accountants to verify income (alt-doc loan).

“It’s vital for brokers to embrace this ‘near or prior prime’ part of the market as the mainstream lenders tighten their credit appetite,” Bluestone head of sales and marketing Royden D’Vaz told MPA. “These are good customers who are looking for a solution to achieve their financial goals.”

He said that the self-employed market is growing, and more and more borrowers are looking for alt-doc loans to fund their businesses, or to pay out inflated business debts they used to keep their business liquid.

Making it quick and easy
Bluestone BDMs offer a high touch support service that helps brokers overcome the trepidation of dealing with non-banks by walking them through the approval process, D’Vaz said.

“Ultimately, this helps brokers navigate the entire cycle, from initial application to settlement. It gives brokers detailed knowledge of the mainstream processes and requirements.”

However, due to near prime’s nature, brokers don’t get to see the process often, potentially causing them to fear that it’s going to be difficult and lengthy. Bluestone BDMs aim to remove that feeling of uncertainty by guiding brokers to reach a positive customer outcome. 

Bluestone also offers a number of technical workshops to educate brokers on the alternatives available for borrowers who were rejected by mainstream banks. “Bluestone BDMs work very closely with their aggregator BDMs to spread the near prime message to brokers,” D’Vaz said.

Be upfront
D’Vaz advised brokers to always manage customer expectation early on; to let customers know during the initial interview that there are options available to them in case they don’t qualify for a mainstream loan. He encourages brokers to use the “bad news, good news” approach.

He also advised brokers to have the payment difference ready for the customer, and relate the difference back to weekly payments rather than in rate. D’Vaz explained that customers don’t correlate rate to payments, so brokers should take on that responsibility.

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