Despite the increasing popularity of non-QM loans, some brokers and originators are still hesitant to dip their toes in this growing segment. Brian Hewitt, national sales manager at NextUs Lending, joined MPA in its latest podcast episode to talk about non-QM loans and how overwhelmed loan officers can overcome the challenges of underwriting non-QM.
One factor that turns off loan officers is the idea that non-QM is more complex when calculating a borrower’s credit score and loan eligibility. While that may be true in some cases, Hewitt asserts that t. are different ways to underwrite income that can provide an accurate picture of the borrower’s ability to repay the loan.
“We’ve put together a very detailed Excel spreadsheet for when a broker sends bank statements, PNL or even business tax returns. We have a staff on hand that goes through the .rmation, puts it on a spreadsheet, and .s the final underwriting income figures out to the loan officer so that they can go back with confidence and say, ‘OK, if I submit this file with this .rmation, this is what the income figure is going to be’. So really then all they’re dealing with is the borrowers, other debts, and how that works into the debt-to-income ratios,” Hewitt shared.