Back in the Wild, Wild West era of mortgage lending before the housing crisis, NINJA loans (loans given to borrowers with no income, no job, and no assets required) became quite the rage.
NINA loans are loans that do not include a requirement for a borrower to prove income or assets. No Income, No Assets = NINA.
And now, NINA loans are back, as 360 Mortgage Group announced this week that it is launching a no-income, no-asset mortgage pilot program.
The loan program, which the Austin, Texas-based mortgage banking firm calls the “Agency NINA,” does not require borrowers to prove their income or assets in order to be approved for the loan.
The loan is also available for borrowers with FICO scores as low as 620, which would firmly put the loan in the subprime range, as Experian considers subprime to be borrowers with FICO scores below 670.
According to 360 Mortgage, the Agency NINA mortgage is available for loan-to-value ratios of up to 80%.
It’s important to note that despite the loan carrying the “Agency” name, which would imply that one of the government-sponsored enterprises is backing the loan, neither Fannie Mae nor Freddie Mac is backing these loans.
According to 360 Mortgage, the loans will be backed by private capital with guidelines sourced from Fannie Mae’s seller guide. The loans will then either be held in portfolio or placed into a private securitization.
Another caveat is that the Agency NINA loans will not be available for owner-occupied properties, at least in this initial phase.
Initially, the loan will be available for non-owner-occupied investment properties only.
360 Mortgage said that it plans to issue as much as $1 billion in these loans, at which point the company will evaluate the performance of the loans to determine if additional occupancy options will be added.
In the initial phase, investors can use the loans for purchases, refinances, and cash-out refinances.
“The idea behind this product is to allow a more lenient option for investors to purchase, refinance or cash out of their properties,” the company said in a release.
Given the nature of the loan, the Agency NINA is also well outside of the Qualified Mortgage box, but 360 Mortgage Group Chief Operating Officer Andrew WeissMalik said that the loan is not like the other non-QM options that are increasing in popularity.
“We are excited to be the first lender in the marketplace to offer this unique product,” WeissMalik said. “It isn’t some non-QM bank statement program you see every other lender out there offering. Rather, a no income, no asset common sense FICO and LTV based solution for those that are willing and capable of making timely payments but don’t fit within the highly regulated, ultra conservative, guidelines every other lender offers.”
This isn’t the first time that 360 Mortgage has been near the forefront of the expansion of the credit box.
Just over four years ago, 360 Mortgage was one of the companies to offer Fannie Mae and Freddie Mac 97% LTV products.
But things have come a long way since then.