We’re not just a Fannie, Freddie, Government industry anymore. Remember pre-meltdown when most lenders required a multiple investor exit strategy for each loan? Then post-meltdown the only game in town was an agency loan?
At this time, if you had a question on a file, you wouldn’t need to call the underwriter, you would just look to Fannie’s guidelines. There were no exceptions, but there might be an overlay. Fast forward to today when a lot of capital market folks have been trained with the mindset, “its Fannie’s way or the highway.” But, there’s a new old sheriff in town – the Non-QM loan.
Not to be confused with Sub-prime or even alt-A loans, Non-QM loans are designed to meet the specific credit needs of what most bankers would call a “quality borrower.” These borrowers meet the ATR requirements and are important bank customers – a professional, business owner that is successful with a proven track record, for example. These Non-QM qualifiers are probably buying their step-up home or maybe even a second home. The game has probably changed quite a bit since they purchased their first home as a W-2 borrower and were able to sail through the application process.
The majority of Non-QM applicants own or serve as a partner in a business with complicated tax returns and multiple bank statements – or maybe the home being purchased has a loan amount above GSE limits? A Non-QM loan is for investors who provide the liquidity to meet the demand. Fortunately, these programs bring back the days of being able to tell your story and talk to someone about the merits of the loan. It’s local banking at it’s best, without the drawbacks.
In today’s hyper competitive lending space most everyone agrees that successful loan officers need to be less salesy and more consultative. Many of today’s Non-QM investors support questions throughout the loan review process, offering pre-approvals as well as clear to close reviews. This ability to dialog with multiple investors harnesses the benefit of having a multipleinvestor option to support the need for profitable, preforming loans that go beyond the qualified mortgage.
If Non-QM loans are something you and your firm would like to explore, I would welcome the opportunity to learn more about your needs and review how Reliant Bank may help your team continue to grow beyond the QM space. Contact me, Jim Mitchell, to discuss becoming an approved correspondent
Jim Mitchell, Correspondent Regional Sales Director, Reliant Bank
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