Angel Oak is finding the borrowers that fit into the non-QM mold are "very underserved" today, just as they were when the company spotted the need and jumped into the non-QM business nearly a decade ago, Tom Hutchens, an executive vice president at Angel Oak, said.īy contrast, conventional lenders are scrambling to downsize their businesses as soaring mortgage rates curb their business. By the end of the year, some experts predict that the non-QM market will as much as quadruple to $100 billion.Īngel Oak Mortgage Solutions, another non-QM lender, projected that its originations would surge to $7.5 billion this year from $3.9 billion in 2021. ![]() So as the mortgage market intensifies its focus on these underserved workers, the non-QM market is expanding. ![]() These lenders' loans differ from conventional mortgages, as they aren't guaranteed by the US government or the finance agencies Fannie Mae and Freddie Mac - which have stricter underwriting guidelines - and they don't meet the definition of a gold-standard "qualified mortgage" set by the Consumer Financial Protection Bureau. Now, with the rest of the mortgage industry shrinking, these lenders are doing better than ever by catering to borrowers who were outcasts of the market because of low credit scores, heavy debt, or their status as nonsalaried workers. Following the subprime-mortgage crisis, they've been embraced by some but haven't played a major role in US housing finance. Their specialty caters to investors and everyday borrowers who couldn't qualify for the tight underwriting standards that followed the 2008 housing bust, as well as to the self-employed. They offer competitive pricing and say they help those who are on the road to repairing their credit. ![]() Sprout Mortgage, Angel Oak, Carrington, and Athas Capital Group are four of the lenders who promise to help borrowers without a W-2. The number of Americans who have trouble landing a mortgage is on the rise, and a group of niche lenders are cashing in to help.
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