In today’s current mortgage landscape, many lenders seeking to remain competitive are expanding their product offerings to include non-qualified mortgage (non-QM) loans. There are potential borrowers who are viable applicants, even though they might not qualify for traditional mortgages.
Adding non-QM to your product mix does require more than offering the loan option itself. Lenders need to know they have the right lending infrastructure to deliver borrowers the best homebuying experience.
Here are four primary ways automating more of the mortgage process and ensuring you have the right tech stack can help deal with the challenges (and opportunities) presented by non-QM loans:
1. Automate Your Error-Prone Manual Processes
Lenders can optimize the efficiency of their processes with smart process automation, redesigned processes using machine learning and robotic process automation (RPA) to remove repetitive, manual, and error-prone back-office tasks.
However, although several technology solutions can help lenders automate mortgage processing, not many specialize in non-QM loans. As non-QM loans are diverse by nature, you need the specialized technology that a configurable SaaS-based loan system offers to streamline tasks and close loans faster.
2. Mitigate Fraud Risks
Defending against fraud is critical for lenders, especially if you are delving into unique markets like non-QM.
It is important for lenders to ensure the right systems are in place to verify a borrower’s information throughout the process. For example, verification of employment (VOE) and multiple applications or credit report inquiries must be monitored. Additionally, as more states authorize the use of Remote Online Notarization (RON), identity verification is more important than ever.
3. Manage Regulatory Compliance
Today, compliance is top-of-mind for U.S.-based lenders. When your LOS has an open application programming interface (API) with numerous automated compliance integrations you can be confident in your lending practices when offering non-QM loans. With a configurable business rules engine, you can better ensure that you are complying with the ability-to-repay rule, which still applies to non-QM loans. This functionality also helps ensure that lenders comply with the Home Mortgage Disclosure Act (HMDA) and the Nationwide Mortgage Licensing System (NMLS) to make certain that loans are underwritten without bias.
4. Maximize Volume & Profit Through Third-Party Originators
Brokers are looking for lenders who can get their borrowers into loans, even if their applications are unconventional. While a non-QM product offering will help you (as the lender) to attract brokers to your business, it is important to ensure you have the right technology in place to keep the process streamlined for all involved.
In order to establish a trusted relationship with brokers and solidify potential repeat business, you will want to offer a simplified loan origination experience to your brokers through a powerful yet easy to use TPO Portal that makes onboarding the loan, pricing it, generating disclosures, service ordering, and condition completion as easy for the broker as possible.
Why Choose MeridianLink Mortgage Loan Origination Software for Non-QM?
MeridianLink Mortgage LOS helps lenders streamline processes for mortgage lending, including non-QM. Our platform comes with a rules-based engine that enables users to automate various operations, including underwriting, product pricing, closing cost generation, and more.
Lenders can create and upload loan requests, run automated underwriting systems, and monitor applications end-to-end using our third-party portal. In addition, MeridianLink Mortgage’s open API enables integration with more than 400 third-party systems, including customer relationship management, accounting, servicing platforms, and more.
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