7/24/2023 0 Comments Non qm loans 2021 ratesHutchens is convinced that greater automation of the underwriting process for non-QM loans is achievable today, despite the extra loan-review challenges these anything-but-cookie-cutter mortgages pose. “Angel Oak forecasts its origination volume for non-QM loans to be $400 million per month combined for both platforms.” “Through July 2021, AOMS has originated $1.52 billion in non-QM loans and AOHL has originated $260.88 million,” the report states. The Fitch report also reveals that Angel Oak is in a high-growth mode in the non-QM space. “So, maybe instead of underwriting three loans a day, they could underwrite five or six or seven” because technology is creating efficiencies in the process.Ī recent Fitch Ratings report on Angel Oak’s most recent private-label securitization, its eight this year, states the following: “Angel Oak is also working on the rollout of a non-QM desktop underwriter tool to speed up and standardize the manual underwriting of non- QM loans.” Hutchens said that technology and underwriting automation will not replace human underwriters, but rather just make them more efficient by allowing the computer to handle the functions that can be automated. “We are delighted to welcome Angel Oak as a strategic investor to help us accelerate the development of next-generation solutions for the financial services marketplace.” “Asset Class removes the inefficiencies and waste that come from largely paper-based interactions across our target markets,” said Ferdinand Roberts, CEO and founder of Asset Class, in a statement announcing Angel Oak’s investment. In fact, this past spring, Angel Oak made a $3 million seed-round investment in a Dublin, Ireland-based fintech called Asset Class that is focused on creating greater efficiencies for affiliate Angel Oak Capital’s private fund investors. “We think non-QM is in a high-growth mode, and that’s going to continue for years to come.”Ĭonsequently, Angel Oak is embracing automation to better accommodate that projected growth across its product lines. “We’re expecting close to 100% growth from 2021, and this year, 2021, is our biggest year ever,” he said. “Automation just increases efficiencies,” Hutchens added.Īngel Oak Companies, Hutchens said, is focused on originating and securitizing non-QM loans to the self-employed and real estate investors, which represent about 90% of the company’s loan-origination base. “We are looking at the current $25 billion-a-year market growing to $200 or $300 billion, and it’s going to require automation,” said Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, part of Angel Oak Companies, a long-time player in the non-QM market. The pool of non-QM borrowers includes real estate investors, property flippers, foreign nationals, business owners and the self-employed, as well as a smaller group of homebuyers facing credit challenges, such as past bankruptcies. It’s a wide and growing segment of the mortgage-finance market that is expected to expand rapidly as rising home prices, changing job dynamics and upward-sloping interest rates push more borrowers outside the agency envelope. Non-QM mortgages, Lind explained, include everything that cannot command a government, or “agency,” stamp through Fannie Mae, Freddie Mac or via another government-backed loan program, such as the Federal Housing Administration. “Could someone one day come up with the right technologies non-QM? It’s going to happen at some point, or at least make it much easier.” “With non-QM, the scenarios are just everywhere, and it requires an expertise and a skill set that takes years to learn. “Automated underwriting for agency products is definitely much easier because there’s a defined set of scenarios that you have to meet,” says Keith Lind, executive chairman and president of Acra Lending (a non-QM lender formerly known as Citadel Servicing).
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