Private investors still haven’t fully returned to the market for mortgages, but they are still hungry for non-agency jumbo loans.
Companies like Denver-based Titan Lenders Corporation is actively creating a network of correspondent originators for its jumbo product, for which they sell directly to one private investor, according to Mike Eberl, director of regional sales.
“We look for originators who do what we do; those who have expertise in jumbo origination,” and those that have capital behind them, he added.
Why only jumbo product?
Eberl says that they have low risk (20% down-payment) and the investor that they work with keeps them on their balance sheet. Working with one known investor with a similar process keeps the process smooth and simple, Eberl added. Originators know what types of loans they have to make to sell them into the secondary market as well as how much they will make on each loan, Eberl said.
Most mortgage companies are getting into jumbo product, in one way or another, following the financial crisis. Private investors such as PennyMac, Redwood Trust, and JPMorgan Chase have all issued several jumbo-backed deals each year since 2010.