New Rez Smart series non-QM loans

[Craig Thurman]

I am wondering if any investors out there have used the New Rez smart series loan products meant for borrowers that may not qualify for conventional lending products.  A couple of the groups it is targeted towards are investors and self-employed borrowers.  I am mostly interested to know how the interest rates may differ from a more traditional route and I would love to hear how someone's experience was using that loan product or something similar that any of you would recommend.

Thanks to anyone who responds!

[Chris Mason]

I went through a 4 month period less than a year ago, trying all the big non-qm lenders, the best reviewed ones, and a few smaller ones promising that "we're different." They weren't different, the process and consumer experience was basically the same:

- Crap process.

- Slow turntimes. 

- Crap rates.

- High points.

- Opaque guidelines and underwriting criteria.

Every non-qm lender had some combination of 3 or 4 out of that 5, and they would basically never tell you upfront where they are strong and where they are weak, everyone promises the world and under-delivers. And at the end, when we finally closed the loan after a very painful process, the consumer / borrower / investor typically did not like me, they thought "I" ripped them off (nope, that's where the market is for these loans), they think "we" were too slow (nope, our internal turntime was same business day, then it sits in a queue for an eternity), et cetera. As someone building a sustainable business centered on good will, karma, Realtor referrals, and past client referrals, this was incompatible with my business model, and we no longer offer non-qm loans. 

I might revisit it in a year or two.

You of course, as an investor, have different interests. And in spite of the above it may still make sense for you to bark up this tree. But at least I've set your expectations, now you won't be surprised. 

[Tim Johnson]

Lots of non qm lenders out in the market.  @Chris Mason said.  Expect higher rates and slow turn times. 

They work great on refi when it doesn't matter if it takes 60-90 days to close, but they are a nightmare on purchases.

Expect rate to be 2-3 points higher and about 1-2 points in junk fees.  So your looking around 6% to 7% to 8% depending on what you want to do.

[Andrew Postell]

@Craig Thurman as suggested above the Non-QM Lenders have a lot of drawbacks. Most successful investors use smaller, local banks for these types of loans.  Maybe even post in your state form here on Bigger Pockets to find some other locals who might be able to suggest some lenders along these lines.

[Craig Thurman]

Thanks to each of you for the response and insight.  I am not in a situation yet where I will need to use non-QM lending but I am going to continue my search here locally to find a good fit for when I am ready.