Ben Fertig (pictured top), president of Constructive Capital, is working to spread the word that these non-QM products would be helpful to brokers, whether through his company or others.
“They don’t use them enough, in my opinion,” Fertig told Mortgage Professional America. “I’m trying to spread the message that they should use them more, especially brokers whose core competency, historically, has been conventional government loans or anything that’s owner-occupied.”
Diversifying revenue
Fertig said that while owner-occupied mortgage loans will always be the largest sector of the mortgage industry, investor loans are continuing to grow in popularity. Brokers who don’t have access to non-QM products are shutting themselves out of that market segment.
“Owner-occupied loans are always going to be a much bigger market, but if you look at the trend, there’s more opportunity to lend to investors on a relative basis,” Fertig said. “They’re much less rate sensitive. The other thing is that the investor base, by nature, most of these guys own more than one property. It’s a recurring borrower base. It makes it much more efficient in terms of your cost to acquire that borrower when they borrow multiple times.”
Not only do brokers benefit from working with customers who are more likely to come back for additional mortgage loans more frequently than the standard owner-occupied customer, but it also helps shield a broker if the conventional market hits a slump.
