Why non-QM lending is not going away

Non-QM lenders have been going through a turbulent time in the past few months. HousingWire recently spoke with John Jeanmonod, Regional Vice President of Sales at Angel Oak, about non-QM lending and the outlook for the second half of 2022.

HousingWire: Given the recent news about a few non-QM lenders shutting down, some loan officers might be hesitant about working with non-QM. What would you say to those loan officers?


John Jeanmonod: The key to being successful with non-QM is choosing the right non-QM lender. Angel Oak has been in the non-QM space now for many years. Our company was born out of the financial crisis to provide non-QM loan solutions for underserved borrowers such as self-employed. We were founded during a time of volatility and our business model has set us up to survive challenging times since.

The bottom line though is the fact that non-QM is not going away because there will always be non-QM borrowers such as self-employed and real estate investors who don’t qualify under Agency guidelines. There is not a credit issue in the market right now that is causing volatility – non-QM loans are good performing loans issued to credit-worthy borrowers.  This is why we can confidently tell loan officers that non-QM is how they can protect their volume and referral base in times of volatility.

HW: What strategies can loan officers employ to win with non-QM in the second half of 2022?

JJ: A conversation with an Angel Oak account executive is a good place to start. They can help with how to market outside of normal channels. Loan officers should know they do not have to be an expert on non-QM. We have been out educating the mortgage industry on what non-QM is and how to utilize it since we were founded. We have trained originators on non-QM while they closed their first non-QM loan.

One great idea is setting up meetings and having an experienced account executive in non-QM present as the expert on their behalf. It brings something of value to Realtors, CPAs, attorneys, wealth advisors that they can then pass on to their clients. It’s full-circle customer service that results in commissions and referrals.

HW: What are some of the foreseeable challenges in the second half and how can they overcome them?

JJ: The biggest challenge is the decrease in originations, mainly because of a major decline in the refinance market. However, people are still buying homes and homeowners are getting cash-out refis. Not in droves like in 2021, but the business is out there. Get back to basics to find it. For some, that means getting out of their comfort zone. Arrange meetings, go to networking events, host networking events and develop more referral relationships. Invite your Angel Oak account executive to join you to start the conversation about non-QM.

HW: How is Angel Oak poised to help loan officers succeed in this difficult environment?

JJ: As I have mentioned, our training that we offer could be very beneficial. We can educate originators in a number of ways in non-QM programs and help market to outside normal channels. We have presentations, webinars, and marketing materials ready to go. Since we are the end investor, we do not have to seek third party approval to do a loan. We tell you upfront if we can do a loan, and then we get it closed. This seamless process is one reason why many originators have worked with us for many years.

Sometimes a complex market calls for a return to simple solutions. Face to face meetings and stronger partnerships with referral partners and your account executive can help originators battle through a challenging market.

To learn more about how Angel Oak is poised to help loan officers succeed in this difficult environment, visit angeloakms.com.

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