Mortgage Lender Says It’s Seeing ‘Marked Uptick’ In Non-QM Loan Activity

Altavera Mortgage Services, which offers third-party residential mortgage origination services, reports that it has seen a marked uptick in non-qualified mortgage (non-QM) inquiries in the first quarter.

“While non-QM still represents only a portion of our overall client portfolio, approximately 35% of new client inquiries are for non-QM work,” says Brian Simons, president and founder of Altavera, in a release. “We’re seeing a rise in demand from originators for underwriting and processing support and from aggregators for pre-purchase review.”

The firm notes that this increase in non-QM activity is coming from originators, aggregators and investors.

Simons says the data suggests that the industry is preparing for increased business in the second quarter and the second half of this year.

“One of our clients recently requested four additional underwriters and three additional processors to prepare for their projected volume over the next few months,” Simons says. “We also know of several non-QM investors that are hiring extra business development and sales personnel. In our experience, these kinds of staffing trends are a good indicator of what’s in the pipeline.”

In addition, there has been a gradual easing of credit by some lenders, as well as a greater comfort level by banks to hold non-QM products, Simons says.

In its January 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices, the Federal Reserve reported that lending standards are beginning to ease for all non-QM loan types except subprime loans.

Further, there has been an uptick in the origination of interest-only mortgage loans.

“We anticipate that as interest rates increase, we’ll see even more interest in non-QM products,” says Debora Aydelotte, chief operating officer for Altavera. “Already, our clients are originating a variety of non-QM loan types, from jumbo loans to loans with a higher debt-to-income ratio than what’s allowed under the QM rules. We’re also seeing increased interest in early foreclosure release and asset inclusion loans.”


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