Question for Conventional/Non-QM Brokers/Lenders that do DSCR loa

[Robin Simon]

For any conventional/non-QM brokers and lenders - if you do a full suite of products for investment properties, I'm curious to know how many deals start as conventional / or non-QM non-DSCR (such as Bank Statement, Asset Depletion, etc.) but then hits a snag in qualification and then moves/qualifies as DSCR (instead of deal getting completely canceled). Do a lot of the borrowers that miss qualifying at underwriting end up switching to a DSCR loan or is that portion just ended up canceling the deal?

Also curious if there have been any changes in the above answers in the current climate vs. last year etc

[Jonathan Taylor]

@Robin Simon depends on what each LOs initial analysis is. We aim to look at as much info as possible to avoid the switch. Elements such as low tri merge, low appraisal, unforeseen property issues are the main reasons I switch to other programs but I personally have not had a lot of issues with full doc IP purchase/refis vs DSCR Non-Qm clients. For the climate today, Im doing more Non Qm as its getting harder to make full doc work in the low to mid asset range (100-500k). For more experienced clients in the small balance commercial space (1-5m) I am not having that many issues closing since we have more pieces at play to make the loan work. As in more income, assets, cross collateral options, etc.