The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law in the summer of 2010 by the President of the United States. Along with other regulatory reforms, this Act created minimum standards for mortgages, including the Ability to Repay (ATR) rules and a Qualified Mortgage definition. The Consumer Financial Protection Bureau (CFPB) put these new rules into effect on January 10, 2014.
A Non-QM loan can help borrowers who have had credit issues in the past such as foreclosures, bankruptcy, late payments or other isolated credit issues. Non-QM loans also have underwriting guidelines that are different than the typical conventional or government type loans. These guidelines allow the lender to look at the entire loan picture for a borrower and not just their credit score and government underwriting matrices (DU or LP).
The Non-QM lending guidelines also look at the borrower’s income based on their type of employment and analyze their Ability to Repay (ATR) a loan according to its terms (based on many factors). This includes cash flows through personal and business bank accounts.
Self-employed borrowers typically have more complicated income structures that require different calculations than wage earners. This type of income often times does not qualify under the “one size fits all” conventional/government underwriting standards.
HomeXpress Mortgage provides loans to borrowers that have the ability to repay their loans and that meet all regulatory lending criteria. These borrowers can now take part in the American dream of homeownership even though they may have had a life event that affected their credit or they have verifiable income that needs to be considered outside a standard grid.
Non-Qualified Loans
Every person has a story.
Our loans help more people put the pieces of the home buying puzzle together.
The concept of qualified and non-qualified mortgage loans was introduced in the summer of 2010, when the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law in the by the President of the United States. Along with other regulatory reforms, this Act created minimum standards for mortgages, including the Ability to Repay (ATR) rules and a Qualified Mortgage definition. The Consumer Financial Protection Bureau (CFPB) put these new rules into effect on January 10, 2014. These rules introduced this differentiation between qualified and non-qualified loans.
In the world of home loans, a qualified mortgage is a home loan that complies with rules established by the Consumer Financial Protection Bureau (CFPB) and standards set by the federal government. Loans sold or insured by national brokers such as Freddie Mac and Fannie Mae are qualified mortgages, but unfortunately these loans are not accessible to everyone due to the strict nature of the requirements in the loan application and review process.
That’s where non-QM loans (which stands for non-qualified mortgage loan) play a role in helping make the dream of owning a home possible to more people. These are loans that do not meet the federal standards, and have different terms and allow lenders like HomeX Mortgage to accept alternative income documentation to qualify borrowers for their mortgage.
Who are these loans for?
Most often, we see future homeowners in one of the following three situations:
- Borrowers that are self-employed and have a lot of write-offs on their tax returns
- Borrowers with recent credit issues
- Borrowers that wish to purchase Investment properties
How do these loans help?
These loans are available to borrowers who may have had credit problems in the past. Such issues can include foreclosures, bankruptcy, late payments or other isolated credit issues. Non QM loans also have underwriting guidelines that are different than the typical conventional or government type loans. These guidelines allow the lender to look at the entire loan picture for a borrower and not just their credit score and government underwriting matrices (DU or LP).
The Non-QM lending guidelines also look at the borrower’s income based on their type of employment and analyze their Ability to Repay (ATR) a loan according to its terms (based on many factors). This includes cash flows through personal and business bank accounts.
Self-employed borrowers typically have more complicated income structures that require different calculations than wage earners. This type of income often times does not qualify under the “one size fits all” conventional/government underwriting standards.
HomeXpress Mortgage provides loans to borrowers that have the ability to repay their loans and that meet all regulatory lending criteria. These borrowers can now take part in the American dream of homeownership even though they may have had a life event that affected their credit or they have verifiable income that needs to be considered outside a standard grid.
But is a non-qualified loan just a “bad loan” in disguise?
No. This is a common misconception. HomeX Mortgage has several types of non-QM loans on offer, each with its own set of rates and rules. Just like the process for qualified loans, applicants still go through a full review process to assess their ability to make the loan payments successfully in the future. It is a responsible lending process with the flexibility that allows us to accept a different set of documents (allowing for alternatives to pay stubs, which are accepted in qualified loans) during the application process.
This is exactly how HomeX Mortgage is able to offer mortgages and make owning a home possible for a wider range of people, including business owners with past blips in their credit history or self-employed professionals who aren’t on a traditional payroll and may have a more sporadic income.
Why turn to HomeX Mortgage?
We are a wholesale mortgage lender. We are licensed to work with partners, including mortgage brokers and mortgage bankers, in 28 states. As lenders, we help brokers provide non-QM loan products to their clients. Our account executives work directly with brokers and our Broker Platform gives brokers a real-time look at loan status for all of their clients.
HomeX Non-QM Products
- PrimeX Lowest rates for consumers who nearly qualified for and have not had a foreclosure in the last four years.
- CoreX For borrowers that have a FICO score as low as 500.
- InvestorX FULL/ALT For investors who can show income via tax returns or pay stubs.
- InvestorX DSCR A no income verification loan for investors without proof of income – investors are qualified based on the rental fee for the property in question.
Explore our rate sheets and programs for further details about each of our loan products.
HomeX Mortgage is licensed to work in 28 states and in Washington DC:
Alabama, Arizona, Arkansas, California (BRE and DBO), Colorado, Connecticut, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Maryland, Minnesota, Nevada, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin.
Visit our State Licensing page for full license details.
Speed. Ease. Convenience.
HomeX Mortgage is all about providing top-notch service. We’re quick to respond and our team is a pleasure to deal with. Our account executives are experienced, knowledgeable, and responsive.. We encourage you to find out why we have the best service in the non-QM part of the industry.
Our Broker Portal technology provides you alerts when loans hit major milestones along the loan process, such as when loans come in or are assigned to underwriters. We also have a pricing engine which show you pricing options on our products. Once you’ve submitted a loan, you’ll be able to see loan conditions in real-time and see whether those conditions have been cleared.
If you are a broker or mortgage banker who would like to more easily match customers with non-QM loans, get in touch with our team to learn more about our individual QM loan products and services. Give us a call at 714-598-1430 or start our broker application online.
