With the non-QM sector continuing to see phenomenal growth, Citadel Servicing Corp. (CSC) has announced changes across its product line to make non-QM loans an even more attractive proposition.
The first big addition will put more money in originators’ pockets: CSC is increasing lender-paid compensation across the board.
“We were previously maxed out at two points of lender-paid compensation,” said Will Fisher, senior vice president and national sales and marketing director at CSC. “Some of our originators just needed more to make their business models work, so we are now going up to three points of lender-paid compensation. That’s on all three product lines – Non-Prime, Maggi Plus, and Outside Dodd-Frank.”
Fisher anticipated that originators would welcome the change.
“We expect to see some gains in volume from it,” he said. “It also allows the originators to put more money in their pockets. It’s going to make Citadel an even more attractive option. We’re already the price leader in this space; this change just solidifies it.”
Citadel has also announced changes to its Outside Dodd-Frank program.
“On this program, we’ve dropped rates up to half a point across the board,” Fisher said. “We’re going after some higher credit tiers with this product. Before, we were priced primarily for 700 and below. We were the most competitive company in that tier, so we’ve decided to expand.
“We’ve also eliminated any penalty for properties listed in the most recent three- to six-month-listed,” he said. “If you had a property that was listed for sale inside six months, the odds of it paying off due to a sale were pretty likely. So, as you would expect, there would be either an LTV hit or a prepayment penalty or an increase in interest rate to counter that increased risk of early payoff. But we feel very confident in our portfolio, so we can ease that hit.”
Lastly and possibly the most radical addition to the CSC line up of products, is for the allowance of non-licenced or non NMLS licenced brokers to submit and funded ODF Plus loans with CSC.
“ODF Plus caters to small-balance commercial properties, five- to 35-unit multifamily and mix use properties. The properties, need a residential influence to qualify,” Fisher said.
Here’s a quick breakdown of all of Citadel’s product changes:
Product Wide: Non-Prime, Maggi Plus, ODF
- Paying up to 3pts Lender Paid Comp
- Reduced rates up to .500 product wide
- Removed 3-6 month listed property adjustments to rate / LTV
ODF Plus (small-balance commercial) commercial properties with residential influence
- Now accepting Non NMLS licensed brokers or commercial only brokers (residential licensing not needed)
- YSP up to 3%
- Ability to waive impounds
Fisher said that CSC’s experience in the non-QM space created the opportunity to make the product changes.
“For the last six years, we’ve been polishing the stone, so to speak, and we’ve found where we can gain efficiencies and how to grow our platform and scale effectively,” he said. “Now we’re seeing the fruits of our labor and being able to be increasingly innovative with product compared to what’s currently out there.”
Want to know more about non-prime? Will Fisher will be sharing his strategies to make the most of the non-QM space at the Power Originator Summit, April 4 at the Anaheim Convention Center. Register here to reserve your spot!