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May 11, 2022

More Non-QM Mortgage Originators in 2022

How are Non-Qualified Mortgage (Non-QM) Originators impacting the mortgage industry?

Calling borrowers who are attracted to Non-QM mortgage loans the “heartbeat of the U.S. economy,” HousingWire’s Bill Conroy finds that rising interest rates and the gig economy are fueling the growth of the non-prime private label market. To be honest, this comes as no surprise to us. 

Because the Mortgage Cadence Platform LOS is used by some of the largest Non-QM lenders in the industry, we’ve been watching this sector with interest for some time. We are seeing strong growth here. 

Conroy’s sources put the size of the total addressable market somewhere between $175 and $200 billion. That might actually be on the low side. 

As Conway points out in his article, Non-QM can be difficult to define because many different loan programs and borrower types play a role in this business. Even a change in documentation can push a loan into the Non-QM space. Basically, they are just about everything that isn’t plain vanilla agency paper. 

There have been challenges with liquidity in the past, but that seems to be less of a problem these days. The bigger challenge for many is having origination technology that can easily be applied to the various Non-QM products that a lender may want to originate. 

Being nimble in this space can be difficult if you can’t make changes quickly, which is one of the reasons we are often called into discussions with new Non-QM lenders. Our embedded document engine and Product & Pricing Engine (PP&E) allow lenders to quickly launch new products ahead of their competitors. A full set of APIs makes it easy to connect the required third party partners and any required proprietary underwriting engines to get new loan programs up quickly. 

In an increasingly competitive marketplace, lenders must offer a broader set of loan programs and be nimble enough to quickly launch new programs to meet borrower needs. 

If your technology doesn’t allow you to do that today, now is the time to have a conversation before competitors build their reputations in your market.

By Joe Camerieri, EVP, Client Account Management at Mortgage Cadence 

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Media Contacts 

Mortgage Cadence: 
Megan Martin 
EVP, Marketing 
(516) 480-6765