Learn to dominate non-QM, brokers urged

Davis, a veteran mortgage industry executive with more than 20 years’ experience, told Mortgage Professional America that he had been attracted by the company culture at Deephaven as it was “focused solely” on the non-agency space.

Making a case for non-QM, he added: “If you just look at the demographics, there’s more self-employed borrowers, and folks that have multiple jobs, and due to COVID people like moving and buying second homes, (but) your standard W2 or tax returns don’t work, so those are multiple reasons why this space is growing.”

He said non-QM was “solution-based lending” because borrowers who were ideally suited to the product were in many instances high earners who were less concerned about a rising rate environment.

“These borrowers are not as rate sensitive,” he said. “If you look at the average non-QM customer, they’re in the low 70% LTV range, mid-700 FICO, below 30 DTI ration, so they have skin in the game.”