While most of the mortgage lending world is still concentrating on TRID, some are looking for ways to do more business, and do it better.
Angel Oak Capital Advisors has recently announced that it had closed a $150 million securitization of nonprime loans. -Loans that didn’t fit into the neat QM conventional loan world (Sub-Prime Pool)-. Could this be the first step back into sub-prime lending? Will it help open the doors to more lending opportunities and access to capital for more home buyers? We can only hope so.
Meanwhile, in Japan, a small startup technology company, Herzog, Inc., is toying with the idea of developing software for use by computers to review and approve mortgage loans (Chess Champ) .
Herzog developed a computer that defeated one of Japan’s top Shogi (Japanese Chess) players. They say this was no small feat as Shogi is much more complex than traditional chess having more than double the number of potential moves.
Presently, Herzog is working with Japanese banks and financial firms, including Nomura Holdings, Inc.(Nomura Securities is the initial purchaser of the Angel Oak Security), to utilize their computer, with updated applications, to review and approve mortgage loans, as well as in financial markets forecasting.
They believe a computer can do a much better, and quicker, job of crunching all the numbers and reviewing a potential borrower’s credit and financial history, including the use of social media, to determine a loan approval. Shades of Big Brother…
Although lenders may be concerned with TRID compliance now, the future of mortgage lending lies in the ability to provide the goods and services needed to meet the needs of the customers, delivering them efficiently and honestly, and in manufacturing a quality product that will perform as expected over the long haul.
A return of sub-prime lending, with a better, quicker way to review and approve loans may lead to a brighter future for mortgage lenders. However, there are no shortcuts. More products and computers may help, but true loan quality is still up to the lender.
Lend responsibly my friends.