“I would say lower rates are going to generate more activity, more real estate transactions, more purchases, just more loans, more activity in the whole sector,” Hutchens said. “So non-QM, we’re going to get our share of that. As overall volume grows, the non-QM piece will grow organically. But I think at the same time, our percentage and our piece of the pie is going to continue to grow, as these originators understand and really get their feet wet.”
As he speaks to originators, he stresses that by not just offering non-QM loans, but becoming experts in them, brokers can differentiate themselves from others in their market.
“You need to be doing something different in order to grow your business,” he said. “We have a lot of our customers who are out on social media. They built their brand as the ‘self-employed expert’ or the ‘professional investor expert.’ So they’ve really taken non-QM to that next level, where they don’t fall back into non-QM. They lead with it because it’s a differentiator for them.”
The lingering misconception about the non-QM space is that it is a kind of loan of last resort or used exclusively for those who can’t qualify for agency loans. Hutchens said the other challenge is getting brokers to understand that the lowest rate in the space might not be their best option.
“I do hear from a lot of our customers that maybe are newer customers, that they treated non-QM like an agency loan,” Hutchens said. “They just went into a pricing engine, and they went with the best rate. I would say not all non-QM lenders are the same. Of course, I’m partial, but I would say experience matters. And quality matters. There are a lot of moving parts in non-QM, and those who have the experience know how to move those parts efficiently, which really matters.”