The 1990s were a boom time for the mortgage industry in the United States. Executives working at the time saw the historic boom in refinancing skyrocketing, which would see more than triple the annual volume of home loans written. By the turn of the century, the industry was on fire, fueled by borrowers who previously had no hope of securing funding through traditional agency channels.
A force built on historic performances
IMPAC has been a publicly traded company since 1995. Prior to the 2007-08 crash, the company provided $ 90 billion in home loans, many to ALT-A borrowers, consumers with good credit but unresponsive. to specific approval requirements. agencies.
While the crash has been a very difficult time for anyone working in the industry, Carry said the strength of his company and good leadership have allowed him to persevere.
“We stayed alive and kept the lights on,” he said. “It’s a big deal and I have a lot of respect for the management of the company. To my knowledge, IMPAC was the only non-bank ALT-A lender to survive. “
No one thrived in the years after the crash, but IMPAC was working to bring back its third-party origination (TPO) business as early as 2011. By 2014, the company officially relaunched its line of out-of-branch loans. products, but this time following the industry convention of calling them non-QM.
“It was the right timing,” Carry admits. “At the time, only a few players offered non-QM products to brokers. Many companies in the industry today weren’t even launched at this point. “
Building a new business on the ruins of the old, agency-less business of the past can seem like a complex and dangerous proposition to some. After all, the legendary loans of the past were blamed for the crash that ultimately led to the foreclosure crisis.
Carry maintains that the non-QM products his company offers today bear little resemblance to the pre-crash products offered in the past.
“Non-QM loans are often merged with what we used to call subprime. They are not the same products. We serve a different market, ”he said.
The weighted average FICO score for the IMPAC non-QM borrower is 731. The weighted round LTV is around 68-71%, depending on the month and day. Additionally, Carry says the assets and reserves these borrowers bring to the table are generally substantial. All of this leads to excellent credit profiles for these borrowers.
Feed brokers with non-QM products
Carry says IMPAC entered the market with four main products, a full non-QM doc loan; a bank statement product; an investor cash flow product; and a loan product taken out taking into account the borrower’s liquidity. Since then, Carry says all of its products have evolved.
In 2014, Carry claims that less than five percent of the TPO platform’s lending volume came from its non-QM lending products. Today, over 90% of its volume comes from these products, with its bank statement product being one of the most popular due to its benefits for independent borrowers.
“This is where we see the opportunity today,” Carry said. “And not just for today. We see at least a five-year window of strong growth in the non-QM space. So that’s what we pay attention to.
But that’s not all Carry says IMPAC is paying attention to right now. He and his business are also focused on the brokerage community.
“I think the quality of brokers working in the industry today is extremely high, which gives the borrower yet another reason to work with them,” Carry said. “It works well for us as we have always been very supportive of the brokers we work with in our wholesale business. “
Carry finds it ironic that in the days following the crash, many brokers blamed the problems that led to the crisis. Today, with the increase in the number of professional brokers, it has become clear that these professionals are well educated and very smart about the partners they choose. Part of that is evolution, but Carry believes that many of the brokers who work today have always been accomplished professionals.
He knows this because he says that many of the brokers the company works with today are well aware of the legacy behind the IMPAC name. “This is not our first rodeo,” Carry said. “Not for the TPO business nor for non-QM loans.”
Carry says IMPAC plans to have great success selling non-QM loan products through its wholesale channels and correspondents because the company understands that service and fulfillment are paramount. The brokers she works with are well aware of the company’s commitment to these ideals.
“The sophistication of the modern broker is extremely helpful to us,” Carry said. “The nature of these non-QM loan products is that they are specifically designed for borrowers who generally do not qualify for agency loans. They therefore require a certain level of skill to perform. Our partner brokers provide this.
The right partner for today’s mortgage brokers
Porter says National magazine for mortgage professionals that IMPAC sees a great opportunity in the market today for brokers able to present non-QM loan products to their borrowers. Those who do will need a knowledgeable wholesale lender.
“If your borrower is trying to qualify for a bank statement loan, you need a lending partner who will help you get that loan in a timely manner,” Carry said.
Beyond that, he said IMPAC provides training for brokers to help them identify pitfalls and find opportunities when prequalifying their borrowers. These are not qualifying mortgages that you can just add to a GSE system and expect to get approval and pricing, he said. It comes down to the actual work to get the loan.
“This is a high priority for us and it helps that our broker base is extremely good at what they do,” Carry said. “It’s obviously helpful for their relationship, both with us and their borrowers.”
This is fortunate, Carry said, as more borrowers prefer to use products such as IMPAC’s bank statement loans to establish income from cash flows of businesses or investors, rather than ‘try to pass themselves off as traditional borrowers.
When it comes to investors, they don’t want their lender telling them how many properties they can own. IMPAC is currently working with sophisticated investors who own 50 or more properties. In the past, these real investors were limited to hard money loans or self-financing. Today they have a better option.
These borrowers represent a great opportunity for licensed mortgage brokers who want to learn more about the complexities of non-QM loans. Carry says IMPAC makes this easy.
IMPAC can on-board a new broker in 72 hours. After receiving the package from the broker, a broker can submit loans within three to five days.
But, Carry says, his business won’t just sign up a broker and then forget about them. The company offers a lot of support to help brokers become familiar with the lender’s products.
“We’ve been on this for a long time,” Carry said. “In addition to providing training, we also provide free marketing materials that they can use and we run frequent webinars. “
Carry said IMPAC is ready to partner with brokers. One example he cited was a broker who wanted to grow his business in the real estate community by forging stronger relationships with real estate agents.
“It’s not uncommon for our account managers to go out and partner with brokers, making presentations to the general public or the real estate community. This type of partnership is important to them.
Legends don’t just happen overnight. IMPAC has been in the industry long enough to know what works and what won’t and, according to Carry, the company is committed to both offering the non-QM products that the market is currently demanding and partnering with. with the best in the industry. brokers to deliver these products.
As he says, “We know what we’re doing. Our brokers see the opportunity and they make the decision to work with a lending partner who has the experience, knowledge and resources to help them develop and grow their business in this space.
This article originally appeared in the September 2019 print edition of National Mortgage Professional Magazine.
IMPAC’s Most Popular Non-QM Loan Products
►Bank statement: Ideal for independent borrowers. Easier to qualify than most competitors with only 12 months of reporting required. No tax return required. Up to 90% LTV. Loan amount up to $ 3.0 million, withdrawal up to $ 2.5 million.
►Investor: Qualify based on the cash flow of the property in question. No tax return or DTI calculated. Up to 80% LTV. Loan amount up to $ 2.5 million, withdrawal up to $ 2.0 million.
►Agency Plus: Giant alternative with interest only option. Ideal for borrowers falling just outside of agency guidelines. Shorter waiting times for derogatory credit events. Loan amount up to $ 3.0 million, withdrawal up to $ 2.5 million.
►Asset qualification: Ideal for borrowers with high liquidity. No employment, income or tax declaration is required. No DTI calculated. Loan amount up to $ 3.0 million, withdrawal up to $ 2.5 million.
►All non-QM loan programs have available terms of 5/1, 7/1 and 10/1 ARM as well as 15 and 30 years fixed.