Keeping eyes on the prize: Non-QM and the gig economy

Power panel discussion highlights the opportunities in these underserved markets

Keeping eyes on the prize: Non-QM and the gig economy

The Non-QM sector is a landscape full of opportunities for brokers. Non-QM experts Will Fisher (EVP of non-conforming at LoanStream Mortgage), Eric Morgenson (VP of business development at Angel Oak Mortgage Solutions), and Steve Cutter (senior VP at Acra Lending) joined MPA’s recent Power Panel to discuss the changes in this market and their outlook for the rest of the year.

One area of opportunity that is being missed is the gig economy. Morgenson believes this underserved demographic is one of the biggest prospects out there for brokers.

“It is a phenomenon with this gig economy where people can drop in and have an Amazon play, and they’re pulling in $10,000 a month from it. So, these are not traditional type borrowers. All the traditional lenders are giving them the Heisman Trophy stiff arm, telling them they can’t. The opportunity is when somebody applies for a loan, and they’re told they can’t get it, and they believe that. What I implore this audience to do is investigate these simple programs. This isn’t rocket science. These are non-agency loan programs, and once you understand it, you’ll have the confidence to be able to originate these. It’s not difficult.”

This niche market has been a big focus for LoanStream, which offers a product geared towards gig workers. “LoanStream has taken the gig economy and this type of worker very seriously for a number of years. We’ve had a 1099 product that caters specifically towards this type of borrower,” Fisher said.

Fisher explained that the 1099 loan offering requires minimal documentation, “just enough of what we need to take them up to, only having to put 10% down on the property. We extend this product into a hybrid of a W-2 worker who’s receiving tip income as well, where we can use bank statements to supplement if they can show us the tip income. We keep our eye on the prize and focused on expanding lending where we can, where it’s smart and responsible at the same time, producing a borrower who can perform when the loan is finally made.”

You can watch the full Non-QM Power Panel: “What is the outlook for non-QM in 2022?“ on MPA TV for free.