Athas Capital notches healthy growth giving borrowers what they want

by Scot Kersgaard06 Apr 2016
The subprime market is not a train wreck waiting to happen today the way it was 10 years ago, at least not the way Athas Capital Group and its subprime borrowers approach it. Not only does Athas require borrowers to put at least 20% down, but many have credit scores in the 7s and 8s, and many have verifiable income sufficient to get ‘A’ paper, according to Athas co-founder and co-CEO Brian O’Shaughnessy. “We call it ‘sane subprime,’” he said.

Athas gets borrowers who lost their homes during the crash, but O’Shaughnessy said such borrowers are rare.  So, besides people who may have low credit scores, or difficult to verify income, why do people who could get prime mortgages come to Athas?

“People come to us because we can approve a loan in 4 hours and close very quickly without the kinds of headaches people get at banks,” O’Shaughnessy said. It is a formula that is working. He says the company has grown an average of 30-50% a year since its founding and that the first 2 months of 2016 have seen double the business of the first two months of 2015.

Interest rates typically run from the high 5s to the high 9s he said, with most falling in the 7s. Most borrowers do not intend to keep the loans for more than 1-3 years, he said.

“People generally plan to refinance, but we get them in their homes quickly and they can refinance at their leisure,” O’Shaughnessy said. He said he recently wrote a loan for someone with verified income and a FICO score in the 800s, because the borrower was in a hurry and didn’t want to deal with a traditional lender.

“The dynamics of this market are very different than what we saw from 2000 to 2007. Everyone talks about ‘liar loans,’ and those certainly were out of control. If people would have had more skin in the game, the results would have been different. I’ve been in the business 30+ years, and that was a really strange dynamic back then.”

Athas also loans to investors, doing commercial loans up to $5 million.

O’Shaughnessy’s view of prime lenders was reinforced recently when he took out a personal mortgage with a bank. “I had a credit score in the 700s, full documentation, and it took hundreds of days and was the worst experience of my life. They made me explain things that have no bearing on my credit. The reason we are successful at Athas is because of what the banks are doing to borrowers.”

COMMENTS

  • by Darryl D | 4/6/2016 12:13:36 PM

    Worst company to deal with. I have submitted mortgages to them and never once did I receive an approval within 2 days, don't know how they claim they close fast and approve mortgages within 4 hours but it's complete bs. I would 100% steer away from them, no matter what . Also if your client has had past problems and they are in the 700-800 fico why the heck would you take a rate in the 5s when there are companies legitimate companies offer government back mortgages in the low 4s?

    Also when the owner of the company's records aren't clean enough for him to refi his own mortgage within the normal 30-40 days then does that say about the company as a general and how it is run

  • by Dan | 4/6/2016 12:50:54 PM

    Let's charge subprime rates but demand Agency guidelines. I had the perfect mortgage them, full doc, high FICO's, gift wrapped. Flat turned it down for meaningless technicalities. Easier to go FHA. Can't really figure out what exactly their niche is.

  • by Concerned | 4/9/2016 12:58:42 PM

    Wow an approval in 4 hours... really sounds like they're doing their due diligence on the mortgages they underwrite. Looks like "Sane Subprime" will take us over the edge again and Athas and this O'shawnesy fellow will be leading the way. From the comments above this looks like bad news. I just looked at there rate sheets and the rates are sooo high. I don't know if I really believe the claim of 100's of days to get a traditional mortgage. This clown seems like a carnival barker and not someone who should be trusted with financing peoples homes.

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