By now, I think that mortgage lenders realize the refinance market has run its course. Although some limited refinance opportunities may still exist, for the most part with rates rising and many having already refinanced. Lenders now need to look to the purchase market for their business.
To service the needs of today’s buyers in the current housing market, lenders need more than the standard conventional QM products. They need to offer such things as:
- FHA/VA
- ARM loans (remember them?)
- Rehab loans
- Low down payment products
- Reverse Mortgages
- Alt-A Programs
Some of these products were recently discussed at the 34th Annual Regional Conference of Mortgage Bankers, held at the Harrah’s Resort and Casino’s Conference Center, in Atlantic City, NJ.
If you were there you received some great information about and had access to several lenders offering these products. If not (shame on you), here’s some info about a panel that I moderated on Alt-A lending (Alt-A).
With refi’s going away, fewer homes available, rising interest rates, and many consumers still carrying lower credit scores and higher debt, lenders need to work a little harder to find their business. When they find it, they better have the products to service the home buyer’s needs.
If not, you’ll not only lose the deal, you may also lose the source that referred the business. That can be devastating.
To avoid that happening you may want to start looking at Alt-A products again. Be prepared because these are not your grandfather’s, sub-prime loan programs.
Take a look. You may find that what is now offered may just meet the needs of many of your applicants, and open the doors to much more.
It’s time to step out a little from under the safe harbor umbrella of QM loans. If done right, these new Alt-A products just might be the answer to offset the loss of all that refinance business.
Lend responsibly, my friends.
Editors Note: (Mike Vitali [pictured] was not the original Dos Equis model.)