Is non-QM the future?

Last week I wrote about the fact that we’ve now been under the new CFPB rules for 6 months and how Credit Unions should be considering making non-QM loans. The title of a recent article on the Housing Wire’s web site was “Is non-QM lending the future of housing? Lenders begin offering non-agency products.” You can read the full article here. 

The articles goes on to talk about how the non-QM market is still relatively small – only about $50 billion per year, but it is a market in need. Some lenders, such as Impac Mortgage (a publicly traded, non-depository) are starting to offer non-QM loans all with the name Alt-QM (remind you of anything).

Further, the article suggests that non-QM loans will most likely be made to prime, high net-worth borrowers and that is the current standard today. In other words, people with lots of money are able to get non-QM loans.

But what about the average American? Like the ones that Credit Unions serve. It doesn’t appear that there is much interest or demand among lenders for these loans.

This is where Credit Unions should enter. We have lots of everyday folks who are members and are in need of home loans. These folks may not fit the tight credit box of non-QM lending for other lenders, but they should fit our box. We should be practicing the art of being memberlicious and looking for opportunities to create programs for near-QM loans. Loans that are not quite QM, but that are good solid credit risks and member friendly loans.

continue reading »