While the need for refinances will never fully go away, we can safely say that a market-driven uptick in rates has put us past the peak of the refinance boom. That means smart mortgage professionals should already be working ahead of the curve to expand and enhance their purchase pipelines. In a highly competitive housing market, the tight guidelines of agency loans may prove too limiting for an originator looking to make up some of the gap between their 2020 and 2021 volumes. The answer for many is non-QM and, as more originators look to play in that space, one lender has ramped up its suite of non-QM products.
That lender is Luxury Mortgage Corp. The experienced non-QM lender has recently made a range of enhancements that CEO David Adamo (pictured) told MPA demonstrates its commitment to originators working with non-QM borrowers. Among its enhancements is a removal of cash out limits up to 65% LTV, the reintroduction of a 40-year term option with a max LTV of 80%, loan amounts up to $3.5 million on purchase and rate terms, $2.5 million on cash out and the expansion of max LTV’s up to 90% with FICOs down to 660. They’ve also added bitcoin as an eligible asset and reserve under certain doc types. All this, Adamo explained, has come with aggressive pricing improvements rolled out across all product types.
“We’ve consistently and methodically implemented product and pricing enhancements all along as the non-QM market has continued to steadily regain traction over the past year,” Adamo said, when asked why Luxury Mortgage is rolling out such a wide range of enhancements now.
He explained that these products are uniquely suited to our current highly competitive housing market. They provide a degree of liquidity that’s essential to enabling a broader segment of borrowers’ participation in the housing market. It’s up to brokers and originators to serve these borrowers, though, and Adamo believes that now is exactly the right time to learn non-QM and begin using these enhanced Luxury Mortgage products.
Adamo explained that for mortgage professionals looking to grow their purchase volume, non-QM is the forward-looking business strategy. The mortgage space is highly competitive and adding non-QM into your toolkit will allow any mortgage pro to differentiate themselves in these markets.
Read more: UWM releases new jumbo product amid feud with Rocket, Fairway
These higher LTVs and lower FICO scores may raise eyebrows among some mortgage professionals, but Adamo emphasized that Luxury is still maintaining the same rigorous lending standards. He stressed that their credit box expansions are being made responsibly and will be used to serve qualified borrowers with a clear net benefit and the ability to repay.
Through these enhancements have come a range of pricing improvements as well. Adamo noted that Luxury Mortgage has reduced its base price in the range of 25-62.5 bps depending on doc type. It has also lowered its minimum rates on full and alt doc to 3.375% and investor cashflow loans to 4.125%.
For mortgage pros who want to learn more about the non-QM market, Adamo and the Luxury Mortgage team offer formal training through onboarding and support through the life of a loan. Its account executives are seasoned pros who work constantly with their broker and correspondent channels, and a newly introduced bank statement analysis tool can provide key clarity for bank statement program applicants.
For all the pricing incentives and expanded lending parameters, Adamo believes that what sets Luxury Mortgage apart in the non-QM space is the company’s team of people. For mortgage pros looking to get into non-QM, he believes his team will make the difference.
“Our elite team of account executives are legitimately the very best in the business,” Adamo said. “Each has deep experience in the non-QM space and decades of non-agency wholesale sales pedigree. Originators new to non-QM need this level of expertise to help guide them and effectuate a successful outcome for the borrower. Our amazing operations and underwriting staff are equally as elite and are supremely service oriented. We all work together to make deals happen here and we aren’t intimated by non-QM credit or more complex loan scenarios. In fact, we shine when we can leverage our creativity. Everything we do is with a common sense, proactive approach and empathy for our broker partners and borrowers.”