Non-QM is growing by leaps and bounds – and originators can't afford to be left behind
The non-QM space continues to heat up – and originators who haven’t entered the space yet should jump on board, according to Tom Hutchens, executive vice president of production for Angel Oak Mortgage Solutions.
“We are setting records every month,” Hutchens said. “The adoption level in the mortgage space is really high.”
There are many reasons that non-QM is taking off, Hutchens said.
“I think the most obvious reason is the way the market is going, with refinances being down,” he said. “Non-QM is really the perfect purchase-market product, because it allows more borrowers to become buyers.”
Another reason for the non-QM renaissance – and Angel Oak’s success in particular – is that non-QM loans now have a track record to point to – and it’s a good one.
“We at Angel Oak Mortgage Solutions have been doing this exclusively for five years now,” Hutchens said. “The performance of the loans has been outstanding, and everyone is aware of that. When we first started doing this, we were confident that the loans were going to perform, but we couldn’t be sure. Now we have proof that the loans perform.”
That winning track record – and the current rising-rate environment – make it all the more important for originators to get into the non-QM space, Hutchens said.
“We’re still in the earlier stages of non-QM development, but it’s happening,” he said. “So any originator who has been thinking about it – now’s the time. They’ve got to participate. With the challenges that are happening in the mortgage industry – with volumes, margins, profitability – originators and lenders can’t afford to miss the opportunity to make good loans to qualified buyers. Non-QM allows them to do just that – it’s just outside the agency definition of QM.”
Hutchens also said that mortgage professionals who were curious about non-QM could seek out Angel Oak at upcoming trade shows for more information. There are a number of trade shows coming up, from Originator Connect Aug. 24 through 26, to the Mortgage Bankers Association’s annual conference in October.
Angel Oak will also host a webinar Aug. 23 to show originators how non-QM can grow their book of business.
“Now is the time (to get into non-QM),” Hutchens said. “Why wouldn’t you? There’s no real reason not to and so many reasons why you should.”
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