Mortgage

Non-QM lending on the rise with two more lenders expanding their offerings

NewRez and LoanStream Mortgage increase non-QM presence

Borrowers who do not fit into the Qualified Mortgage box now have an increasing number of options when it comes to finding a lender willing to help them buy a home.

Recently, New American Funding and Plaza Home Mortgage increased their offerings and expanded into non-QM lending, joining a growing group of lenders that are offering mortgages to “non-traditional” borrowers.

Now, two more lenders are increasing their presence in the non-QM lending space: NewRez and LoanStream Mortgage.

NewRez, which recently changed its name from New Penn Financial, announced this week that it is expanding its SMART Series, a collection of non-agency loans that provide a variety of options for “highly qualified borrowers.”

NewRez launched the SMART series last year, aiming to provide mortgage financing for borrowers who are “unable to secure traditional financing, those with an isolated derogatory event, bank statement or asset qualifiers, experienced real estate investors, and non-warrantable condominiums.”

And NewRez recently expanded the program.

According to the company, NewRez expanded several of the terms and features of the SMART series, including loan amounts, FICO and loan-to-value combinations.

For example, the company said that its SmartEdge product, which designed for borrowers qualifying with full documentation with non-agency/non-QM features, has expanded the LTV to 95%.

Additionally, many of the SMART Series products are now available as 40-year interest-only loans, the company said. Beyond that, some of the program requirements have been adjusted as well, including the elimination of site and 2-4 unit condo project reviews.

“With more than a year of successfully originating SMART Series loans, we found that there were opportunities to make adjustments in the programs that would allow us to reach an even larger number of borrowers,” said Kevin Harrigan, president and CEO of NewRez. “We are continually reviewing our product offerings so that we can make needed adjustments based on market conditions and the unique needs of our clients.”

LoanStream Mortgage, on the other hand, is making it easier for mortgage brokers to offer non-QM loans to their borrowers.

According to the company, it “effectively streamlined” its non-prime offerings into a single loan program.

“With the release of the ‘One Program’ and the ‘One Rate Sheet,’ Broker’s and Non-Delegated Correspondents can now quickly and efficiently qualify their borrowers,” the company said in a release.

“Brokers and smaller mortgage bankers are trying to learn these products. When they go to their wholesaler, they get several matrices and rate sheets,” Rabi Aziz, LoanStream’s CEO added. “It’s tough to cut through the clutter and find out where their borrower qualifies or if they will get a better rate in one program or another. Our new ‘One Program’ solves that issue.”

Along with releasing its “One Program,” the company also made a series of “guideline enhancements,” including: new asset qualifier income program, 1099 income program, business purpose qualification enhancements, credit score for primary wage earner, new business bank statement expense ratio option, ITIN’s to 85%, financing for DACA borrowers (a bit of hot topic these days), cash out for reserves, and others.

“We have a dedicated team reviewing internal and external data sources daily, to ensure our product offering is consistently innovative while protecting each borrower it finances by ensuring their ability to repay,” LoanStream President Serene Vernon said. “Looking at March 2018 compared with March 2019, our non-prime fundings are up 300%. We are grateful to our partners for their business and are looking at every way to streamline the process.”

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