How Brokers Can Reach More Borrowers Without QM
Agency loan originations are down sharply this year due to rising interest rates. Fannie Mae recently lowered its projected single-family mortgage origination volume for 2022 from $3 trillion to $2.8 trillion. With lower agency volume, many brokers are turning to non-QMs to supplement their income.
“The dedication and attention to detail of brokers today is tremendous as they focus on getting these loans,” said Keith Lind, CEO of Acra Lending.
Lind said Acra sees brokers coming from two different directions. First, traditional agency brokers who spend more time on non-QM activities now than the agency pipeline they once focused on is virtually non-existent. The second group are brokers on the private lending side.
Reach more and new borrowers
Many brokers and loan officers know a business model where leads come in and they chase them. This model may have worked well for the past two years, but it’s time for a different approach, according to Lind.
“I think if brokers want to get new business today, they have to start thinking outside the box a bit,” he said.
Lind recommended several ways for brokers to reach more new borrowers with non-QM products, including targeting the right people using platforms like LinkedIn and reaching out to new contacts through conferences.
One of the keys is to reach people who have contact with non-QM borrowers, such as real estate agents and CPAs who file self-employed tax returns.
“A lot of non-QM activity, it’s just education – a lot of people don’t even know what we offer,” Lind said. “Part of it is pounding the pavement, going out and meeting a lot of people. And then part of that is targeted advertising of loans or products that they may be offering.
For example, Lind noted the existence of conferences for siled businesses that use 1099 tax forms, such as Uber drivers. He recommended that brokers attend these conferences with informative flyers. Brokers should try to hold group meetings to educate potential borrowers about the possibilities of buying a home with a non-QM loan, as many 1099 borrowers may not know their options.
“If you’re able to target them and educate them effectively, that’s a great way to get your business going,” Lind said.
Products to know
In terms of products brokers should be familiar with, Lind said the two most important were loans for independent borrowers, such as Acra’s bank statement products, and investor loans, such as the DSCR product from Acra. The latter allows investors to qualify for a mortgage based on their cash flow.
Additionally, if brokers have ties to foreign nationals looking to invest in US real estate, Acra has a product for them as well.
“It’s the effort people make to find those groups of people and find a nice, clear narrative that sells them on the products you offer,” he said. “We see people doing this, they have incredible success.”
Choose the right non-QM partner
Another crucial aspect of successful non-QM lending is choosing the right lending partner. At Acra Lending, they make a concerted effort to educate brokers about their products and provide white label marketing materials.
In fact, Lind said, everyone in the company has a good understanding of what works and what doesn’t with non-QM loans, which sets Acra apart from other lenders that don’t. QM.
“We have such a deep bench that can look at a script and become very comfortable and know that we’re doing it well, when a lot of these other stores just don’t have that expertise and it’s difficult,” said he declared. . “It really comes down to living and seeing all of these difficult and convoluted loan situations where we’re able to leverage our knowledge and also teach and help the processors and brokers on the other side who are our customers and partners.” To learn more about partnering with Acra Lending, visit https://acralending.com/.