Why Non-QM Borrowers Won’t Leave Anytime Soon

While originations are down due to a volatile mortgage market, the population of underserved borrowers who need non-QM products is on the rise.

There will always be a population of borrowers who cannot qualify for a home loan by traditional guidelines. This large pool of clients includes self-employed people, real estate investors and people facing credit events.

Prospecting these types of borrowers can help protect your business during market changes. Originators who are actively working in the non-QM space are closing additional loans every month.

A glance profiles of non-QM borrowers

Self employed: According to Upwork, there are approximately 59 million freelancers in the United States and growing.

This includes 1099 and gig economy workers. That’s a lot of potential borrowers. The challenge these borrowers usually face is not being able to use their tax returns due to large tax deductions. They can afford the house and often have good to excellent credit. But their tax returns do not reflect their true financial situation. They need an alternative solution to verify their exact income and ultimately their ability to repay. The solution: bank statement loans.

Angel Oak’s bank statement loan is ideal for the self-employed.

  • Loans up to $3 million
  • 12 or 24 months of authorized personal or business bank statements
  • 1099 tax returns accepted
  • Two-year seasoning required in case of bankruptcy, foreclosure, short sale or deed in lieu

Real estate investors: The volume of investment properties exceeded the purchase of primary residences throughout 2022.

Any originator who has offered a DSCR Investor Cash Flow loan to their investor clients is very happy about it! We concluded several transactions at the same time for the same real estate investor. Many originators have called us to close a cash refinance and purchase for a borrower. They call us because we allow what Fannie and Freddie do not. We help investors buying their 22nd property and those needing title in an LLC.

Marketing to real estate investors is lucrative regardless of the market. Seasoned investors will find ways to continue building their portfolios. They know where to find deals and how to make the market work in their favor. They also know which initiators to trust to get them to the closing table quickly.

Angel Oak’s DSCR Investor Cash Flow Loan is ideal for closing real estate investors.

  • Loans up to $1.5 million
  • No personal income or tax return required
  • Qualifies on property cash flow
  • No limit on the total number of properties
  • Investors can title in an LLC

Credit Challenges: Borrowers who have recovered from foreclosure or bankruptcy don’t have to wait seven years to get a mortgage. Acquire successful creditworthy borrowers with one of our non-QM loan products.

Angel Oak’s Full Doc Portfolio Select is ideal for closing borrowers with credit issues:

  • Loan is up to $2 million
  • One-year seasoning for foreclosure, short sale or deed in lieu
  • Two-year seasoning for bankruptcy
  • Owner occupant, second homes and investment properties

Angel Oak Mortgage Solutions works with its clients to help protect their businesses. Click here to find out how you can start increasing your volume today.

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