Leaders in alternative lending met in Dallas Monday to discuss initiatives, challenges, and what 2020 has in store for non-QM lending during the Non-Prime Lending Council [1] meeting at the Five Star Conference and Expo.
The Five Star Institute’s Non-Prime Lending Council (NLC) includes industry leaders Angel Oak Mortgage Solutions [2] and Deephaven Mortgage [3], and was formed to provide a platform for industry leaders to address challenges, promote growth, and highlighting responsible lending practices.
"Fantastic starting point. I thought the conversation was very inclusive and productive. Most importantly today, it seemed liked we continually came back to the same points throughout the conversation," said Aaron Samples, CEO of First Guaranty Mortgage Corporation [4], and Chair of the Non-Prime Lending Council.
Among the constant themes was that there needs to be a great deal of work and education to remove the negative connotation around non-QM lending.
"I think education was the key word that came out of today's discussions," Samples said. "I think big picture, it is the most important thing we need to do inside our market, and outside the market in general. I there is a hill to climb there, because there is a negative connotation still in the marketplace in terms of what they used to call [sub prime loans] and what non-QM actually is today.
"I think what we discussed in today's meeting is that falls on us. We have to get specific. We have to get very detailed and explain to the market what non-QM actually is."
Other organizations supporting the council are: ACC Mortgage [5], SHD Legal Group, P.A [6]., Sprout Mortgage [7], and Velocity Mortgage Capital [8].
Detailed in the August cover story of MReport [9], non-qualified mortgages represent about 4% of the total originations market in 2018, according to CoreLogic. However, non-QM mortgages have been gaining traction in the current lending environment, growing a full percentage point between 2017-2018.
Among the items discussed was the future of alternative lending, the education of brokers, and ways to compete that grow the industry.