Due to the recent turmoil experienced by non-QM lenders, lenders in this market must remember that picking the correct non-QM product is the key to success with non-QM. The fundamental truth is that non-QM borrowers like self-employed individuals and real estate investors will always be able to obtain loans even though they do not meet Agency requirements; thus, this Non-QM Lending is not going away. There is not currently a credit concern in the market that is producing volatility because non-QM loans are offered to credit-worthy borrowers with an excellent track record of performance.

Loan officers should know that they do not need to be non-QM experts. However, setting up meetings and sending an account executive with experience in non-QM to act as the expert on their behalf is a terrific way to promote non-QM loans. In addition, it provides Realtors, CPAs, attorneys, and wealth advisors with something useful they can subsequently offer their clients.

The biggest issue facing lenders in the Non-QM space is the drop in originations, primarily caused by a significant downturn in the refinance market. Nevertheless, people are still buying houses and arranging cash-out refinances. So the market is there, just not in the same numbers as in 2021. To find it, lenders need to go back to their roots, which might require stepping outside of their comfort zone.

Sometimes a complicated market necessitates a return to straightforward answers. Face-to-face interactions and more solidified relationships with your account executive as a lender and referral partners can help you navigate a difficult market. To read more on Non-QM loans and how lenders are thriving, click here.


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