As time passes, guidelines continue to tighten and fewer people able to qualify for traditional loans. Meanwhile, the non-QM space is becoming more mainstream and understood by realtors and other mortgage professionals.
A lot of that is due to increased awareness and education in the mortgage space, according to Raymond Eshaghian, president of Greenbox Loans. Eshaghian was a pioneer in the non-QM space and Greenbox been a leader in the field for more than five years.
“We’re seeing a year over year increase of effectively doubling production, and at some point, that’s going to grow to a level where non-QM will be a standard part of what brokers offer,” Eshaghian said.
Realtors, builders and borrowers are becoming more aware of the options available to them and want to work with mortgage companies that are offering the full gamut of products. This understanding that there are mortgage professionals out there who can offer alternative financing and can find ways to close loans that may be rejected traditionally is something that’s played a big role in the growth of non-QM, according to Eshaghian.
“It’s becoming more understood. In the past, because of regulatory issues and ability to repay factors that must be considered, a lot of people found it too complicated; but that is changing.”
For brokers and lenders thinking about dipping their toes into the non-QM waters, it’s not too late. The demand continues to grow, and the market of non-QM borrowers isn’t diminishing. Eshaghian noted that divorce rates are still high and bankruptcies are still going to happen, so people in these situations are still going to need non-QM financing. The need for these products are never ending, he said, but being able to offer non-QM products does require a lot of attention and focus.
“These are not products you can just add to your offering. It requires a dedicated team, commitment and a long term understanding of what these products are about. It’s a common mistake for a lot of lenders to simply think they can add non-QM products and have the same staff and organizational flow,” said Eshaghian.
It was a passion and personal desire to get the deal done that pushed Eshaghian into the non-QM space years ago. Being able to structure financing for a qualified borrower through alternative underwriting is something that really drove him to home in on the space.
“Providing financing for qualified borrowers that are made to believe they can’t get a loan gives you a lot of credibility. It also provides a lot of personal satisfaction to help these families into their homes.”
After the housing crisis, the market moved in a direction that was much more standardized and the underwriting conditions were very cookie cutter. Non-prime loans were somewhat of a bad word, but as more professionals became experts in the non-QM realm and offered solutions to qualified borrowers, there began a definite shift in mindset. Eshaghian wants this trend to continue.
“I am bothered by the fact that there are very few professionals who are truly committed to the space. I’d like to see responsible lending going forward as we’ve faced a bad reputation in the past. I would hate to see people be irresponsible due to not gaining a proper understanding of what this is about.”
Raymond Eshaghian has been a recognized business leader and innovator with over 30 years of management experience in the real estate financial sector. His experience and expertise has led to Greenbox Loans becoming a leader in the non-QM space across the country.
Join us at the Power Originator Summit in Anaheim on March 26th, where Raymond Eshaghian will be among many speakers discussing how originators can grow their business and close more loans.