I’m a huge Carolina Panthers fan. After home victories the Panthers blast Neil Diamond’s ‘Sweet Caroline’ across the stadium.
I bet the voice inside your head is singing it now.
“Good times never seemed so good.”
I’m pretty sure that most of us in the mortgage industry have seen better times. Less challenging times for sure. But I’m hugely optimistic about the future of the Non-Qualified Mortgage (non-QM) industry.
While fluctuating interest rates and an unreliable supply of inventory remain key issues across the mortgage industry, the potential customer universe for the secondary market is growing. Societal trends are playing into our hands as more and more people choose self-employment over fixed contracts with a single employer. They’re enjoying the flexibility and freedom this brings but, when it comes to buying property (be it a home or an investment), their credit profiles no longer meet the standards set by our government-sponsored entities or the criteria necessary for a qualified mortgage. These customers are turning to non-QM loan providers for help.
And there’s no shortage of providers vying for their business. As competition gets ever fiercer in our industry, the heat is on to strengthen your position, gain advantage and win more of the quality opportunities. Here are three approaches that are delivering great results of our clients:
1. Step up the pace
Pre and post-funding audits, mortgage service reviews, and servicing releases must be thorough, accurate and fully compliant, adhering to both your internal policies for risk tolerance and external regulations. That’s non-negotiable. But timeliness is important too if you’re to stay ahead of your competitors.
Ours is not an industry for breakaway speeds, but I’ve seen first-hand how shaving even just a few days off review and release turnaround times can have a significant impact on profitability.
Consultants who specialize in optimizing non-QM processes will be able to identify the root causes of bottlenecks in your approach. They’ll work with you to prioritize and implement improvements. Importantly—in an environment where it’s increasingly hard to attract, recruit, and retain the best talent—they’ll be able to supplement and support your existing in-house resource with skilled teams to accelerate turnaround times.
While we remain a people business, the right technologies help underwriters to be their productive best. They streamline internal processes so it’s easier to analyze risk faster and at scale, with no compromise to rigor and compliance. The right technologies are those that complement, and integrate seamlessly with, your trusted review software, so you get maximum value from your existing investments. They need to be proven in the field. And, ideally, they should be available on a pay-as-you-go basis, so you don’t need to make additional capital investments.
2. Strengthen situational awareness
Non-QM clients that come to us identify quality reporting as their number one challenge. Reports must, of course, tick all the regulatory boxes, and be endorsed by rating agencies, but they also need to be easier to access, use, and share.
This is another area where an expert approach, and the appropriate use of technology, can really help. Automation powers quality analytics and provides real-time visibility into the status of each and every audit, resulting in more accurate and efficient reporting.
Essential facts and figures must be clearly summarised and visualized, so it’s easier to spot opportunities, and make informed decisions. Flexibility is important too: Your reporting partner should listen and respond to your needs, tailoring reports to ensure that, whilst conforming to industry standards, they’re delivered when, where, and how works best for your internal stakeholders.
3. Bring on the non-QM veterans
It takes years to build up the know-how to transform the efficiency and effectiveness of non-QM auditing.
You need partners that you can trust to hit the ground running. Talented individuals who’ve been there and done that, who are doers not just thinkers, and who can prove they improve outcomes.
Touchdown with Sourcepoint
You’ll find plenty of veterans at Sourcepoint. Most of us earned our stripes on the client side of our industry. We’ve worked with a wide range of players in the non-QM field and have decades of experience across all aspects of the loan evaluation process. Many of us joined Sourcepoint when it acquired The StoneHill Group, adding quality control and due diligence expertise to their talented outsourced mortgage services team.
Our team speaks your language. You’ll get the support you need — both strategic and executional — to strengthen and accelerate your critical loan evaluation and mortgage servicing rights processes. We continue to invest in proprietary tools and techniques to save you time and money, and ensure stronger, more flexible reporting.
There’s nothing I can do to affect how the Panthers perform. I merely cheer from the side lines and hope for the best. But I know that a partnership with Sourcepoint can significantly improve performance for players in the non-QM field. We’ll help you gain the competitive edge you need.
