NMP - October 2016 - 8

✒ Non-Agency Mortgage Market Moves to Correspondent Relationships By Tom Hutchens T OCTOBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com 8 he year 2016 has been a big year for the growth of correspondent lending in the non-agency mortgage space. Retail lenders have forged new relationships with non-agency correspondent lenders in order to access new products and grow their market share. In simple terms, correspondent lending is a relationship between lenders and mortgage originators in which the lender has the ability to approve the loan before selling it on the secondary market. Unlike mortgage brokers, correspondent lenders originate, fund and brand mortgages in their own name. They also oversee the disclosure and approval process. As with most originators, a warehouse lender is often relied upon to provide short-term financing until the mortgage is sold on the secondary market. Following the Great Recession, warehouse lenders tightened standards and rejected nearly all non-agency and non-QM loan applications. Recently, however these financers have become more accepting of non-agency mortgages, as they've seen a resurgence in originations. Increased volume helps validate nonagency lending as a more liquid market and one that warehouse lenders can take advantage of. What has been the primary factor in warehouse lenders' new found acceptance of non-agency loans? One word: Performance. The performance of today's non-prime/non-QM loans have far exceeded expectations. This has been the key driver to demand and increased liquidity in the investor world. Ultimately, warehouse lenders need to have confidence there is a market for loans being put on their lines and that the market will continue to grow. It's easy to understand why performance has been so strong. All loans are manually underwritten and are required to meet the ability-to-repay standards set forth by Dodd-Frank. With borrowers also making down payments, the final key of "skin in the game" has proven these loans to be extremely sound. The correspondent channel is a good way for lenders to grow their market share because it allows them to expand their product offering and access a larger share of the mortgage market. It gives them a means by which they can branch out into the non-agency or non-QM mortgage market while retaining control on the lending process and relying on a trusted partner to underwrite and approve the loan. It's also easy to make the switch to correspondent lending because the mechanics of closing the loan are nearly identical to the process they're used to with Fannie/Freddie and FHA. At Angel Oak Mortgage Solutions, we've seen an uptick in correspondent lending partnerships in the last few quarters as the housing market warms up to non-agency and non-QM lending. We anticipate growth in these products to continue accelerating across all lending channels. Borrower demand for non-QM loans still far exceeds supply, but we are now seeing lenders in the industry beginning to address that demand. 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 Address Your Stress BY ANDY W. HARRIS, CRMS uying or selling a home while securing a new mortgage can be one of the most stressful temporary experiences people face in life. There are a lot of mixed emotions, planning, demands and deadlines. Your clients rely on you to help them navigate through the process and at times this can feel like a burden when things outside of your control don't go as planned. Most would agree that the mortgage industry today can be one of the most stressful occupations as a mortgage loan originator. It's imperative that you realize this and prepare for the diversity and sometimes insanity that goes with this industry. Certainly the regulatory and appraisal environment doesn't help when trying to manage your own stress and the stress of your clients. Finding ways of putting the process in perspective will always help dissolve conflict. I believe many in this industry truly put their clients before themselves by spending time communicating, educating, and simply applying a hard day's work each and every minute spent at the office. This is a good thing, but only if you acknowledge and pay attention to your own level of stress internally or externally and listen to your body. Natural stress can be normal when dealing with situations and a demanding environment, which can simply become a feeling of being overwhelmed at times. Chronic stress can become an issue if not dealt with by finding ways of relaxation and separation. If your body releases adrenaline or excess levels of sustained cortisol as a stress response, it can lead to health problems. According to many some include: B l l l l Anxiety Depression Digestive problems Headaches l l l l Heart disease Sleep problems Weight gain Memory and concentration impairment What I find more fascinating is the studies that have been conducted about our mental perception versus reality on how stress can impact our health. The University of Western Ontario found that people who believe their stress is affecting their health are twice as likely to have a heart attack ten years later. Pennsylvania State University found that stress was not the problem, but how we react to stressors. If you have two people with the same amount of work to do and one is grumpy and stressed about it and the other doesn't let it bother them, this will greatly impact the future health of the stressed out person. It's not easy to always manage stress during demanding situations in this industry, but it is possible with perspective. If we all realize the importance of our mental perception and how we respond to these demands, I believe our health will improve as a result. Don't let temporary transactions change the big picture. If you control and balance your stress well, you'll find that your clients and all those around you will be able to as well more easily. 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 - October 2016

Table of Contents
NMP - October 2016 - Cover1
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NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
NMP - October 2016 - 3
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