Investor interest in non-QM growing fast – Angel Oak

by Ryan Smith12 Feb 2020

Angel Oak posted a record year in 2019. But the company’s growth isn’t just measured in originations – it’s also measured in increased investor interest.

“If the investors aren’t there, there’s no way for non-QM to grow,” said Tom Hutchens, executive vice president of production for Angel Oak Mortgage Solutions. “I think that’s what makes us unique – we’re driving it on both ends. You can’t have growth on one end without growth on the other.”

Since the non-QM space isn’t agency-driven, Hutchens said, private capital is a vital component of the sector’s success.

“The reason that investor demand continues to grow at such strong levels is the performance and the quality of originations,” he said. “The test of time has really proven that there’s a need in the market, and we and others have the ability to originate good, performing loans.” 

It’s that consistent quality in originations that keeps investor interest high, Hutchens said – especially in light of the 2008 mortgage meltdown.

“The challenges of the past, the crisis – that’s still on people’s minds,” he said. “So it’s not just, ‘Hey, let’s throw some money at this loan.’ Every single non-QM loan that is securitized goes through a third-party due-diligence review. There’s a level of transparency that was no part of the market pre-crisis. And with the QM patch going away, it’s critical that investors have confidence in the non-agency market. I think we’ve done a good job in building that confidence.”