Non-QM Guidelines Too Tight?
Sub-prime got a bad rep when Wall Street got involved with securitizations. I was doing non-prime since the 1980s and they were never a problem until the posers got involved and started doing Stated Income deals with 100% LTVs and the like. If done with some restraint, they can be solid deals. I’m just concerned that, as the market expands, some will start lowering their standards and repeat the mistakes of the past. Hope I’m wrong.
oh boy…it’s happening again. It’s the same idiots making the same decisions just 2018 instead of 2004. It should be easy to understand Non Qualified Mortgage. NON QUALIFIED…HELLO!? Also, did he really say “responsible non QM borrowers”. Those were the same responsible borrowers with 580 credit scores that the mortgage industry thought they would make their mortgage payments after putting no money down to buy a house and having a credit report showing they had NEVER paid ANYONE on time. And…has anyone verified the “only 8” foreclosure claim? It would be kind of like verifying the performance of the Friends of Angelo loan portfolio at Countrywide.
See my comment about Angel Oak from last Thu, 5/10 here: https://thenationalrealestatepost.com/city-dwellers-migrating-to-the-burbs/. Ironic that today’s NREP title is ‘non-qm guidelines too tight’ with an interview with Angel Oak. They have an unpublished hidden guideline regarding subordination of existing HELOC that will set a nasty trap and potentially embarrass an LO with their client. As I mentioned Thu, fortunately the AE was helpful and mentioned this before I submitted a full pre-qual (not sure if it would have been even caught at that time).
Other than that guideline trap, hopefully I’ll have another non-QM scenario that may fit under their ‘tight’ guidelines (that’s the irony with today’s title).
I think you (Scott Johnson) may not fully understand what Non-QM versus QM loan really means. It is not as cu and dry as “Non-QM means they do not qualify for a QM loan.” Non QM could have a 44% DTI, or an I/O feature, 40 year AM, etc…All of these are viable and great loans in and of themselves. Once you add in other “risk factors” (low FICO, BK, Foreclosures, short sales, charge-offs, etc…or combine these, that is where you may have an issue and this is not the direction that the mortgage industry is going. Or needs to go.
Scott Johnson. Raj Date just made up something called a “Qualified Mortgage” and their ‘parameters’ when he was head of the CFPB. He could have made it anything he wanted. The same with Loan Officer Compensation rule. There was no basis for the any of the criteria, he just made them up.
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