By using a common-sense approach to alternative lending, Angel Oak Mortgage Solutions is paving the way for borrowers who don’t fit in the narrow credit box of most QM loans. The company balances the needs of would-be homeowners with regulation requirements and risk mitigation, and, as a result, is leading the industry in subprime, non-QM lending.

“Our mission is to provide more options to brokers, borrowers, and the mortgage industry in general,” said Tom Hutchens, SVP of sales and marketing.

Unlike the subprime loans originated in the run-up to the financial crisis, Angel Oak has parameters in place to alleviate risk and make subprime lending viable.

All of the company’s owner-occupied transactions meet the ability-to-repay (ATR) guidelines mandated by the Dodd-Frank Act, including documented income verification.

Today’s subprime borrowers have an average credit score of 660, versus the average of 580 in 2006.

To manage the complexity of these types of loans, Angel Oak takes a hands-on approach to the underwriting process, looking at a variety of data to make the right loan.

“We do not use a computer to make our lending decisions — our credit risk team manually underwrites every loan that comes through our system,” Mark Lively, SVP credit risk and operations, said.Market makers

“Our underwriters look at each loan on a case-by-case basis, ensuring that all aspects of the loan are taken into consideration; not just the numbers that Desktop Underwriter uses to make a decision.”

By requiring that all borrowers provide a minimum down payment of 20%, Angel Oak ensures that consumers have “skin in the game” and offsets the risk posed by borrowers with a challenging housing history.

“Borrowers need to know that a recent housing event (foreclosure, short sale, deed-in-lieu, bankruptcy) or a need for alternative documentation (bank statements, property cash flow products) will not necessarily prevent them from getting a mortgage loan. Angel Oak regularly makes loans for borrowers whose situations make sense,” Alexandra Rodriguez, marketing director, said. “Our aggressive programs provide these borrowers with options that would not otherwise have been available, and these borrowers can rest easy knowing that Angel Oak’s loans follow all regulatory requirements currently in place.”

The company’s alternative loan strategy is a win for brokers, too, since they are able to provide loans for a wider subset of consumers.

Dan McKenzie, managing partner at Options Mortgage Services in Alpharetta, Georgia, commented on the level of customer service he experienced working with Angel Oak, and how that impacted his borrower.

“When I contacted [my borrowers] to tell them that y’all were going to make their closing happen, I could hear [her] crying in the background,” McKenzie said.

 “You have a special organization. From setup to processing to underwriting to closing, you guys made exceptions for us and helped us get this done in a week and a half, so that they can move in tomorrow. Sometimes in our business, we just see the paperwork and don’t recognize that we are working with real people moving all their families, stuff, and disrupting their lives in the course of it. It is a pleasure to work with an organization that is willing to go that extra mile and recognize that we are working with real people,” McKenzie said.

The benefits for both borrowers and brokers is what Angel Oak is all about, Hutchens said.

”Our commitment to truly helping our borrowers get into homes is unrivaled. Our underwriters and closers do everything they can to find a way to make the loan work so the borrowers can get into their homes.”

The executives

HutchensTom Hutchens, SVP Sales & Marketing

Tom Hutchens, senior vice president of Angel Oak Mortgage Solutions, has been in the real estate lending business for nearly 20 years. Previously, he was a senior sales executive with Atlanta-based SouthStar Funding, where he helped build one of the nation’s largest subprime lenders. In 2014, Hutchens joined Angel Oak Mortgage Solutions and is responsible for sales and marketing for the company.

 

Lively

Mark Lively, SVP Credit Risk & Operations

Mark Lively joined Angel Oak in 2014 as the senior vice president of operations and credit risk. Prior to joining Angel Oak, Lively was the president of Amerisave Mortgage. His 28 years of experience in the industry include positions at Citi Mortgage, SouthStar Funding and other lending institutions.


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