BPO firm deploys platform to streamline non-QM loan processing
Alternative lender I Fund Cities has partnered with RARE Consulting Solutions, a business process outsourcing firm, to launch a new platform for non-qualified mortgage (non-QM) and private lenders.
Non-QM loans cater to borrowers who don’t meet the criteria for conventional mortgages, such as LLCs, partnerships, and self-employed individuals. The loans play a vital role in facilitating property ownership and investment opportunities for these borrowers, but the lending process can be complex due to the varied financial profiles involved.
According to the company’s media release, the platform utilizes automated systems to streamline and replicate processes typically used in qualified mortgage (QM) lending, while also offering the flexibility to handle the diverse income types and credit histories of non-QM borrowers.
“The platform is developed to specifically address the ever-evolving demands of the non-QM and private lending markets,” said Bryan Ziegenfuse, manager at I Fund Cities. “[It] not only speeds up the loan qualification and approval processes but also enhances the ability to analyze a variety of income types and consider credit events not typically seen in QM lending. This kind of innovation is crucial for navigating the complexities of the non-QM lending market and for reshaping the future of mortgage lending with a stronger sense of purpose and efficiency.”
This launch comes at a time when many banks are tightening their lending standards, particularly for non-QM loans.
A Federal Reserve survey showed that lending criteria for loans eligible for purchase by Fannie Mae and Freddie Mac remain mostly unchanged. However, banks are becoming more conservative with their non-QM lending.
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Banks may be tightening their lending belts, but this creates an opening for non-QM lenders. Keith Lind, CEO of non-QM lender Acra Lending, believes lenders with the right tools can weather this “choppy” environment and thrive.
Lind sees non-QM as a “nice alternative” when the market for government-backed loans weakens. He suggests brokers connect with non-QM originators to learn more about these products, which he believes will continue to grow in importance.
“My message for people that are out there that aren’t doing non-QM: don’t be scared,” Lind told MPA in a recent interview. “It’s not that difficult. It’s definitely a change from agency, but I think there’s a lot to learn for brokers or real estate agents. And there are a lot of solutions that non-QM provides that people just don’t understand.
“I’d say, ‘don’t be shy’. Reach out to… non-QM originators that you’ve thought about… and learn the product. Because it’s not slowing down – it’s going to continue to grow. And I think it’s a nice alternative when the agency market dries up where people can make a lot of money.”
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