What’s next for non-QM? Luxury Mortgage reveals all

MPA caught up with Kathleen Kaylor (pictured above) and Matthew Hamilton (pictured below) – two subject matter experts and account executives from Luxury Mortgage’s wholesale division – to better understand its most recent product updates and pricing improvements.

MPA: What in particular are the enhancements to your non-QM suite of products? Can you take us through them?

Katheen Kaylor: We’re proud to announce the addition of over 20 new enhancements to our already robust non-QM underwriting guidelines and pricing. Some of the most notable enhancements include increased max LTVs, greater accommodation of transferred appraisals, collections do not need to be paid off in some cases, and foreign national borrowers can now qualify for loans utilizing either liquid assets or rental income on subject investment properties.

Highlights include:

• Bank Statements/1099/Full Doc qualifying loans, the loan amount is now $1,500,000 at 90% LTV, and for a cash out refinance 80% LTV to $1,500,000;
• Max loan amount is $3.5 Million on certain products;
  • The Bank Statement product allows for a one-year self-employed with two years previous employment in same line of work.;
• DSCR/Investor product now qualifies with IO payment up to 75% LTV and landlord experience waived with a 680 Fico;
• Allowance of properties that are agriculturally zoned with less than 20 acres provided;
• New Foreign National product, for non-owner occupied and second homes;
• Simple Mae. An alternative to the Fannie Mae non-owner product;
• DSCR/Investor cash flow base pricing improved by 50 bps.

MPA: Are these new products, improvements on existing products, or both?

KK: We’ve continued to improve on our existing program offerings as well as adding new products. We have recently rolled out a new Foreign National product and the Simple Mae full doc agency eligible non-owner occupied product. One of Luxury Mortgage’s goals is to continue to develop and enhance our loan menu; so we can assist our brokers and correspondent sellers with qualifying more borrowers. We are here to offer innovative alternatives to conventional financing. We get it! Not all borrowers and transactions are the same and offering different program options is what makes our broker community stand out from our competition.

MPA: Are these enhancements part of a wider new initiative/company approach moving in latter 2021/2022?

KK: The enhancements that have been made to our programs are a direct result of identifying more lending opportunities in the non-QM space. When the government agencies decided to reduce their exposure on second home and non-owner occupancy products, Luxury’s Mortgage came up with a solution and created the SIMPLE MAE product. By adding more non-QM products we are continuing our commitment to expand our lending activity to borrowers who have been underserved and unable to obtain financing through the traditional products in the marketplace.

We won’t stop here. We are committed to making our professional partners the best they can be. We see a lot of opportunity in the non-QM lending space and are proud to be a part of it and look forward to our continued success with our professional partners.

MPA: Can you take us through the loan products to foreign nationals? What do they entail?

Matthew Hamilton: We have always considered lending to Foreign Nationals but until recently it was by exception only. I feel our credit risk team created an excellent loan offering with our new Simple Access Non-QM – Foreign Nationals program. Just some of the highlights include loan amounts to $3 million, no US credit score or credit history required, interest only with no reduction to the LTV and non-warrantable condos may be considered. Our LTV maximum makes a huge difference; we will go 75% LTV to $2 million on a purchase and 70% LTV on a rate/term refi. All our Foreign National loans will be for second homes and investment properties only and we offer both fixed rates and ARM loans.

MPA: Are there any particular challenges involved in catering to foreign nationals rather than domestic clients?

MH: There are unique challenges when dealing with foreign nationals and that is why we decided to focus on investment properties and second homes. Our program only requires the borrower have the legal ability to enter the US, there is no length of stay requirement. We also created a list of overseas banking institutions that if a borrower has a relationship with a bank on that list they are not required to move their funds to the US. There is always the issue of credit and credit scores when you deal with foreign nationals. We decided not to evaluate any credit history so long as the borrower does not have a US social security number or US credit. If they do then we will analyze the US data, but no foreign credit information is required.

MPA: What about the enhancements/new products makes them unique to Luxury Mortgage/your organization’s approach?

MH: The enhancements we recently instituted expand on our theme of always moving forward and creating the best possible customer experience. When restrictions are removed and guidelines are enhanced to allow more borrowers to qualify and close, we help our clients better service their referral partners. Making the process easier for the borrower creates a potential new referral source for our broker. This industry is about service, options, ease of use and customer retention. If you provide your client with options and a clear way forward that is easy to navigate, they will become repeat users.