Non-QM loan originations have been projected to hit between $80 billion and $100 billion in 2022, which means there is a hugely untapped market for private lenders in the non-QM loan sector of the lending industry. In an interview with Mike Fierman, the Managing Partner and CEO of Angel Oak Capital, he said that he believes that 2022 will be the year where non-QM loans provide lenders with the immense ability to grow their business. A Non-QM loan (Non-Qualified Mortgage Loan) is a loan that is not necessary to satisfy agency standard documentation requirements as provided by the Consumer Financial Protection Bureau (CFPB).

Non-QM loans have had the most extensive supply record in the year 2021, with analysts having so much confidence in the growth for the year 2022. Investors’ demands are expected to continue to grow as the sector grows in size. With new investors coming in and taking part in non-QM loan transactions, the confidence in the non-QM space gradually builds up. With funding costs rising as the front end of the rate curve is sold off, loan prices have normalized from luxurious levels due to huge supply. Thus, the atmosphere around non-QM loans keeps getting positive.

Many lenders need to hop into the non-QM loan space as there is an increased demand for these loans, and lenders need to stay competitive to retain a healthy margin and keep the business running. As a result, lenders can rest assured that non-QM is an excellent strategy to fulfill the business’s volume goals.

To read more about non-QM loans and how lenders can benefit from the massive boom in the space, click here.

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