Qualified mortgage lending has often been the traditionally approved mortgage lending solution since it meets the required government standards. However, various corporate bodies such as the New Residential investment corporation under Michael Nierenberg have sought an alternative known as non-Qualified mortgage lending. This is a modern mortgage lending solution that is an improvement of the traditional one. Improvement in the sense in which it addresses the rigidity and inflexibility in the loan application process faced under the traditional method.
Why Non-Qualified Mortgage lending?
Contradistinguishing both QM mortgage and Non-QM mortgage gives a clear picture of what efficiency and flexibility are all about. Non-QM mortgage practically provides leniency when it comes to the procedure in borrowing as compared to the QM mortgage which had a tendency to phase out prospective borrowers due to the strict guidelines that it entailed. However, despite all this, the ability to repay rule which is common in both still stands as one of the requisites in the loan application process. Thus, Michael Nierenberg has come forth to suggest that a blend of both QM and Non-QM mortgage lending is the best solution.
The Impact in the Market
New residential which is headed by Michael Nierenberg acquired NewRez. NewRez has substantially emerged as a loan originating company that deals with both QM and Non-QM mortgage lending solutions. The impact it has made in the market has not gone unnoticed notably the skyrocketing of the Non-QM mortgage loans originations within a very short period.
The Shift in Mortgage Lending Solutions
Business Mogul, Michael Nierenberg’s ideas have been deemed to be the chief contributor in the shift in mortgage lending. Many investors have chosen to go the way of Non-QM mortgage lending as an alternative to the traditional method. The non-QM securitization has also added more significance to this shift. It would be prudent to say that the investors have not overlooked the restrictive challenges posed by the Qualified mortgage’s need to adhere to the credit criteria imposed by the government agencies. Ultimately there is an increased role in other financial institutions that deal with mortgage lending solutions who also support the Non-QM mortgage as the best alternative going forward.