Since the Qualified Mortgage rule went into effect in early 2014, non-QM lending has become a multi-billion-dollar business.
For all the doubters out there, take note that some early adopters are now making big bucks originating loans that don’t meet the rigid QM definition.
If you’re curious just who these mortgage lenders are, wonder no further.
We now have a handy top-10 list of non-QM lenders courtesy of the Scotsman Guide, which bases its list on comprehensive, verified loan data from some of the largest mortgage companies in existence.
Collectively, these lenders mustered around $6 billion in non-QM loan volume in 2020, which is pretty impressive for such a nascent business.
Top 10 Non-QM Lenders in 2020
1. American Pacific Mortgage – $1.5 billion ($22 billion overall)
2. Angel Oak Mortgage Solutions – $1.4 billion ($1.9 billion overall)
3. Trident Mortgage Co. – $722 million ($3.1 billion overall)
4. Academy Mortgage Corp. – $493 million ($15.4 billion overall)
5. Better.com – $406 million ($22.6 billion overall)
6. NewRez LLC – $365 million ($61.6 billion overall)
7. Finance of America Mortgage – $352 million ($29.8 billion overall)
8. Caliber Home Loans – $337 million ($80.3 billion overall)
9. New American Funding – $249 million ($31 billion overall)
10. Guaranteed Rate – $239 million ($13.4 billion overall)
As you can see, American Pacific Mortgage led the non-QM loan universe in 2020 with a whopping $1.5 billion in overall volume, which accounted for about 7% of their total production.
They barely edged 2nd place finisher Angel Oak Mortgage Solutions and its $1.4 billion in non-QM volume, which represented nearly 75% of their overall business last year.
In third was Devon, PA-based Trident Mortgage Co. with $722 million funded.
Several other big brands made the list, such as newcomer Better.com, Academy Mortgage, NewRez, Caliber Home Loans, New American Funding, and Guaranteed Rate.
Additionally, Atlantic Bay Mortgage Group, LendUS, NJ Lenders Corp., Family First Funding, and Homebridge landed in the top-15.
This should make it clear that non-QM lending is no longer an obscure line of business reserved for smaller shops no one has heard of.
Also, this is the inaugural year that the Scotsman Guide has ranked the top non-QM lenders, which further cements the importance of this type of lending in in the mortgage industry.
It’ll be interesting to see how it grows over time, especially as more traditional lenders get involved to chase higher yields.
Ultimately, they’ll need to offer more exotic products to their customer base as rate and term refinancing loses its luster.
(photo: Marcin Wichary)