UWM began offering non-QM loans in March, producing a podcast explaining to mortgage brokers that “self-employed borrowers require more attention to detail.”
#NON QM LENDERS FLORIDA PROFESSIONAL#
In an April 29 cover story, “ The Non-QM Pig Pile,” National Mortgage Professional hailed the entry of the nation’s biggest wholesale lender, United Wholesale Mortgage, into the non-QM market as “the biggest single indicator yet that lenders and LOs are looking to non-traditional mortgages to make up for a huge decline in traditional volume.”
Sprout Mortgage is just one of several mortgage and real estate companies to downsize in recent weeks, as the Federal Reserve’s efforts to combat inflation by raising interest rates raise worries about a decline in home sales and a potential recession. Non-QM lending: A small but growing niche In addition to its wholesale and correspondent divisions, Sprout sponsors 60 mortgage loan originators working out of 11 retail branch offices, according to the NMLS. Oaktree’s Regional Director of Correspondent Lending Alex Clark left Sprout Mortgage in April.Īccording to the Nationwide Mortgage Licensing System and Registry, Sprout Mortgage is based in Port Saint Lucie, Florida, and licensed in 46 states and Washington, D.C.
Todd Lautzenheiser, the current director of correspondent lending at Oaktree Funding, left a similar role at Sprout Mortgage in March, according to his LinkedIn profile. Theohari Rouskas, vice president of capital markets, posted on LinkedIn that he’d “learned a great deal in my capital markets role at Sprout and am sure I can provide great value to my next team.” But dozens of Sprout Mortgage employees posted accounts of being laid off on LinkedIn.ĭan Leanna, senior vice president of retail sales, called Wednesday “an emotional day” after being told Sprout would be “closing our doors effective immediately.” Sprout Mortgage, which also offered prime jumbo loans too big for purchase by Fannie Mae and Freddie Mac, did not immediately respond to Inman’s requests for comment. “Wall Street wasn’t buying up Non-QM loans,” the account executive told the publication.Īnonymous sources who spoke to National Mortgage Professional said Sprout Mortgage was originating $380 million in loans a month and shut down its retail, wholesale and correspondent divisions. But because non-QM mortgages are riskier and don’t provide legal safe harbors for lenders, they can be harder to securitize and sell to investors.Ī former wholesale account executive at Sprout Mortgage told National Mortgage Professional the company was trying to sell $190 million in loans but was able to sell less than half of them. Lenders who make non-Qualified Mortgages can serve a broader set of borrowers - and charge them more. home loans meet federal guidelines for “ Qualified Mortgages,” which prohibit risky loan features like interest-only loans, limit the upfront points and fees lenders can charge and require lenders to verify the borrower’s monthly income and assets. laying off 76 percent of its workforce on June 24 and filing for Chapter 11 bankruptcy protection from creditors six days later. Sprout Mortgage is the second lender providing “non-Qualified Mortgages” to implode in as many weeks, with PIMCO-backed First Guaranty Mortgage Corp. Sprout Mortgage, which claimed to be the largest provider of “non-QM” mortgages in the U.S., shut down without warning Wednesday leaving more than 300 employees out of work and raising questions about the viability of a small but growing corner of the mortgage business that largely serves self-employed borrowers. When the waters get choppy, trust Inman to help you navigate. Join us in person in Las Vegas at Connect, and utilize your Select subscription for all the information you need to make the right decisions.
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