NMP - September 2016 - 8

✒ The Recent Uptick in Non-Prime Securitizations By Tom Hutchens N SEPTEMBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com 8 on-prime mortgage products have been slowly creeping into the market for the last four years, but total volume still pales in comparison to traditional agency mortgages. One of the headwinds for non-prime mortgages has been wave after wave of refinancing. Loan originators have little incentive to adapt new products when they can simply rely on refi volume. We've hypothesized in past commentaries that the refi spigot would soon shut off, but we are continuously surprised by lower rates. Still, we'd be shocked if we saw negative rates on mortgages at any point in the future. On the other hand, non-prime has experienced a tailwind from robust investor demand, which is beneficial to lenders that need to free up capital or remove risk from their books. This is done through the residential mortgage-backed security (RMBS) vehicle. Investor demand for non-prime RMBS is growing faster than the securitizing agents can create the bonds. This upstream demand is critical as it lets purchasers of loans know that the market is there for them to increase securitization volume. Eventually, the pace of non-prime securitizations will catch up with both demand from investors and the supply of loans on the market. The question is will lenders be able to keep up with demand once we reach that point? Our view is that, by the time securitizations catch up, the majority of refinancing volume will be behind us and lenders will have no choice but to expand their portfolio to include non-prime products. The non-prime mortgage market has seen steady growth even with the aforementioned obstacles. Angel Oak Mortgage Solutions has originated about 2,500 loans since inception. About half of our loans have been securitized, with the latest batch bundled in the Angel Oak Mortgage Trust 2016-1 in mid-August. Now that the link between investors and borrowers has been completed and proven to be successful, volume should start to really pick up. The aforementioned securitization is the seventh non-prime deal in the last year. Furthermore, as these deals start to get rated, investor acceptance and accessibility will expand even further. Rated transactions reduce the cost of capital because people are willing to take a lower rate of return given the lower risk factor. Tom Hutchens is senior vice president of sales and marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale lender currently licensed in 32 states. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or email Info@AngelOakMS.com. SPONSORED EDITORIAL the elite performer Perception vs. Perspective BY ANDY W. HARRIS, CRMS et's face it, we're in a crazy business. I mean a business that can drive a person crazy if we don't analyze things and prepare for the emotions and roller coasters that is real estate. Our clients are facing one of the biggest financial decisions of their life and working with others in the industry can feel like having a conversation with a toddler throwing a temper tantrum. We carry the most important role in the mortgage origination, controlling the process of a non-cash purchase. We need to be level-footed and well-grounded. Simply put, we need to be the leaders in every transaction. Perception is defined as a way of regarding, understanding, or interpreting something; a mental impression. Perspective is defined as a particular attitude toward or way of regarding something; a point of view. While these two definitions may sounds similar, they are quite different. Perception is more personal and individualized on how things may appear, while perspective is more of a reality of how things are. I believe these two words are some of the most important to understand for anyone working in this high stress industry. When we have difficult situations, we need to be able to control our attitudes and responses to each in a manner best suited for the clients we serve. When challenges arise, most people perceive things worse than they really are. When you step outside and find the solution, it's easy to realize the problem is truly not a problem in the grand scheme of things. You can put things into perspective for all parties with data and facts and everything will be okay. You must control your attitude and how you respond during the most challenging times to help comfort those around you and find solutions versus fueling the already potentially twisted perception of reality. This is very important when managing the process, expectations, and changes we face as an industry. I personally deal with this often with the high demands at work. I recall travelling to Belize last year with my beautiful bride for our 10-year anniversary. I can tell you, it was the best thing for perspective anyone can experience. I completely disconnected (for the first time in a long time) and saw things in an entirely different view and perspective. Everything was small, no issue was an issue, and it was "all good." Everyone needs to experience this at least once a year. Sure enough, when I returned it was like I never left. We need to manager ourselves and others in finding the right action and reactions to take. We need to build and sustain a healthy viewpoint in work and life that will help us thrive and enjoy our work. There is nothing wrong with individualism and perception, but if it is skewed or set from false expectations or understanding of how the process works in our business, we need to step in and help all parties put into perspective for the way things are. It's not only when there are potential issues, but just to prepare people for the crazy process they will face when applying for a mortgage loan that could be a fun process if we help them prepare mentally. L Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com. http://www.NationalMortgageProfessional.com http://www.VantageMortgageGroup.com

Table of Contents for the Digital Edition of NMP - September 2016

Table of Contents
NMP - September 2016 - Cover1
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NMP - September 2016 - 1
NMP - September 2016 - Table of Contents
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