With non-QM coming back in a big way, it’s more important than ever for originators to add it to their toolbox – especially before the refi boom ends, according to Angel Oak Mortgage Solutions’ Tom Hutchens.
“We’re in these record refi times, but the more loan officers that we talk to, the more it’s apparent that they all know it’s going to come to an end,” Hutchens told MPA. “Rates tweak up an eighth of a point, and that refi boom is going away.”
That’s why it’s important for originators to have a wide variety of purchase products in their arsenal – including non-QM, Hutchens said.
“Every loan officer will tell you, ‘I’d rather be a purchase loan officer than a refi loan officer’ – because a refi business is built on sand,” he said. “Eighty-plus percent of non-QM transactions are purchase transactions. So you really have to market non-QM to market yourself as a purchase originator.”
Hutchens said that adding non-QM to their toolkit not only gives originators new products to sell – it can expand their business in more traditional areas, too.
“It makes sense to market yourself as a non-QM expert, because saying you do Fannie Mae – how does that make you different?” he said. “Non-QM can be a real differentiator. … The loan officers who do it, it helps grow their agency business too, because they can build new referral sources. If you close a bank statement loan, it’s very reasonable to ask for that agent’s referrals.”
So how does an originator become a non-QM expert?
“It’s twofold,” Hutchens said. “It’s understanding the product, and then marketing and selling it. The number-one resources to become a product expert are Angel Oak account executives. We can host a call with the originator, and our account executive can be the expert on that call.”
And becoming a non-QM expert, Hutchens said, could mean the difference between watching business roll in and watching it pass you by.
“If an agent has gotten a property under contract, and you as an originator can’t get the borrower closed because you’re not comfortable talking about non-QM, that realtor is going to find an originator who can,” he said. “And then that originator is going to get those referrals, not you.”