Though nonbank lenders were hit especially hard after the housing bubble burst, nonbank lenders are making a comeback to fill the void in the housing industry as some banks are taking a step back from lending to everyday consumers after new strict banking standards. According to Forbes, at the beginning of 2014, nonbank lenders made up almost a quarter of all mortgage loans – the highest percentage of mortgage loan lenders since the financial crisis. Additionally, the Wall Street Journal states that nonbank lender mortgages are up from 17% in the first half of 2013 and 11% in the same period in 2012.
Last week, we discussed why a mortgage loan originator may be the ideal career option for professionals who feel stuck in a 9-to-5 job, unsatisfied with the lack of competitive pay and perhaps also lack a four-year degree. This week, we’ll tap into the benefits of working as an MLO for a nonbank lender as opposed to a broker or a standard bank lender.
Working for a big bank feels as expected: a corporate environment with little ties to the local community. In reality, many borrowers prefer nonbank lenders because they are more familiar with the area and the local real estate market, they have a stronger connection to the community and can offer more personalized assistance during a potential tumultuous transition process when moving to a new area.
In talking with The New York Times on the push from small lenders, First Choice Loan Services President Norman Koenigsberg said, “Local knowledge is especially important to borrowers in competitive and often complex real estate markets” such as Atlanta.Borrowers are seeking out a personalized touch throughout the mortgage process, which is more prevalent when provided through a small nonbank lender.
Ability to Assist in Unique Financial Situations
The resurgence and rise of nonbank lenders is good news for consumers with unique financial situations. Oftentimes, banks are unwilling to make loans to borrowers with less than pristine credit. Additionally, banks are limited in their scope of financing options and must operate within strict parameters whereas nonbank lenders have more freedom and alternatives to assist borrowers with less than ideal credit or situations with regard to employment status. Plus, nonbank lenders conduct business with a wide variety of lenders giving hopeful homeowners a better opportunity to land the home of their dreams.
In the Forbes’ “Nonbank Mortgage Lenders Bounce Back,” one borrower turned toward a local, small business nonbank lender after being turned away by one of the largest banks.
“The large banks don’t want to spend a lot of time working with people who have problems,” said Garyah Reed of Arizona. “They just say they can’t help you and move to the next one.”
With the resurgence of nonbank lenders in the mortgage lending industry, MLOs now have a golden opportunity to be a part of a rising industry, to connect with and assist people in their community and help individuals and families reap the joy and benefits of homeownership. As noted in our last week’s column, Southeast Mortgage, one of Georgia’ oldest and largest nonbank lenders, arms our MLOs with an efficient 8-day close, a support team that focuses on referrals and repeat business, specialized training, marketing tools, compliance and legal support and much more. To learn more about Southeast Mortgage or to apply for a position, visit our website.