Angel Oak Companies to Go Over $1 Billion in NonQM Originations

The Angel Oak Companies is set to surpass over $1 Billion in nonqualified mortgage originations for this year.

In a recent press release announcement, Angel Oak Companies which is comprised of Angel Oak Mortgage Solutions, Angel Oak Home Loans, and Angel Oak Prime Bridge said that the company will have collectively originated over a billion worth of mortgages, putting them at the forefront of the nonqualified mortgage industry, at the year’s end.

Innovative portfolio

Throughout the years, Angel Oak has introduced a variety of mortgage products for borrowers. This included a 12-month bank statement program which generally helps borrowers with problematic income issues still get a home loan.

As part of its expansion, Angel Oak recently added 65 more employees to their lending platform in order to broaden their reach to more states such as Seattle, Portland, Philadelphia, Minneapolis, Columbus, Las Vegas, Houston, and New Jersey.

They have also established a new correspondent lending channel which will accelerate the mortgage origination process and help the company originate more loans.

Angel Oak’s co-CEO Mike Flerman believes that their success only reflects that the industry itself is changing.

“Clearly, investors, brokers and consumers are feeling more comfortable with these products,” he adds.

It can be well remembered that after the economy collapsed in 2008, the government established laws that would make sure the same disaster would never happen.

Among them is the Dodd-Frank Act which separated mortgages into qualified and nonqualified categories. Those who meet the guidelines set by the government are considered qualified.

Are they safe?

During the early years after the crisis, many lenders have pursued only borrowers who can commit to the ability-to-repay rule, assuring the lenders that their investments are safe. Most of the mortgage products fell into the qualified category with little to no alternative for those with bad credit or those who have unconventional financial records.

Now, almost a decade after that nightmare that taxed billions to the global economy, lenders are starting to loosen their belt and get lenient with their underwriting standards. The new strut is making way for new mortgage programs that are considered nonqualified.

These programs have benefited numerous clients who have difficulty purchasing a home due to a) bad credit b) difficulty in traditionally documenting income c) having too high an income d) having high debts or e) a combination of these factors.

These people comprise a large number of the borrower market and when lenders realized that there is a huge chunk of the population whose were underserved, they sought to provide alternative opportunities.

There has been the repeated question of whether these products are safe or not and truly, the lines are blurred. There is always a risk involved and every case is different. At the end of the day, safety is placed on the cautiousness of the buyer and the dependability of the lender.

Steven Schwalb, managing partner of Angel Oak’s lending platform, for example, believes that they’re on the right track in helping more people get access to homeownership.

“Originating $1 billion in non-QM loans is an important milestone that demonstrates the market’s confidence in these products and our work in the non-QM space,” he says.

“We’ve worked really hard to develop an innovative product line that helps creditworthy borrowers obtain financing. The fact that we are able to securitize and sell these mortgages to investors highlights the quality of our originations.”