But when the credit markets seize up and liquidity stops, all of the sudden we went to maybe a low of 85 or 88 cents on the dollar. “The origination credit quality was very good. “Pre-COVID, loans were trading at 103, 104, maybe even 105, and the margins were there and it was a successful business,” said Keith Lind, the executive chairman and president of Citadel Servicing, one of the biggest non-QM lenders in the country. Over the last several months, liquidity has poured back into the non-QM market, prompting roughly a half-dozen lenders to once again underwrite non-QM loans. Others took stock of their product offerings and tech stacks and initiated strategies to build stronger companies in the wake of the pandemic. Some firms quickly pivoted to conventional products to serve remaining customers.

“I lost $6 million in April,” the broker added.ĭuring the freeze, non-QM lenders – who issue mortgages that can’t be sold to Fannie Mae or Freddie Mac, typically to self-employed borrowers – stopped accepting applications, collectively laid off hundreds of workers had difficult conversations with their investors, correspondent partners and mortgage brokers alike and plotted an eventual return to an uncertain market. “And damn if we didn’t close Friday and they shut it down Monday.” “I told my client, my friends, ‘Look, I know you’re supposed to close in 10 days but we’re closing Friday and you let everybody know it or you may not close,’” Dodson said. Liquidity had dried up and bond investors were running for the hills.Īt that point, Dodson was actively working on a jumbo loan for friends of his from church. His corner of the Atlanta mortgage market – high-value home loans that wouldn’t be bought by the GSEs – was booming.īut by March there were whispers that the non-QM space was going to vanish soon. Mark Dodson was having a promising start to the year. Non-QM originators are ramping up operations, but finding brokers willing to work the loans remains a challenge By James Kleimann

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