Non-prime is here to stay

by Heather Turner10 Nov 2016
The non-prime mortgage market is making a comeback as evidenced by Angel Oak’s significant growth in recent months. Angel Oak, an Atlanta-based mortgage lender, has experienced steady growth throughout 2016; most recently, the firm completed its third securitization with another in the works for next month – solidifying their commitment to revitalizing the non-prime market. The securitization planned for November is expected to be a “game-changer” for the company and the entire non-prime industry as a whole said Dennis Colon, regional sales manager at Angel Oak.
“As LTDs increase, rates decrease and we become more aggressive,” said Colon. “Every 3 to 6 months, we hit a very aggressive growth spurt in the industry. We just had one within the last 30 days when LTDS across the board went up and rates went down. We expect the next big growth period will be when our next securitization hits and is rated.”                                                                                                                    
The revival of non-prime loans is finally opening the door to borrowers who have been without mortgage options in recent years. As rates for other mortgage products rise, the need for non-prime/subprime loan products trickle back into the market said Colon. “The [market] trajectory has been going up and up ever since we started and I don’t see it slowing down,” he continued.
Colon also pointed out that it is important to note that the quality of loans today is drastically different from the quality of loans originated prior to the financial crisis – a stigma that may still be present in the market. “The overall loan, from the underwriting to the down payment, is underwritten on the notion to make a quality loan. Whereas before, companies simply looked at a loan, sold it to Wall Street and was done with it.” The commitment to originating quality loans has resulted in record months this year for Angel Oak, in addition to a delinquency ratio that is nearly at zero. “The quality of these loans is something we have never seen in the past,” he said.
Focused on continuing their “massive growth,” Colon added that Angel Oak is aimed at increasing staff from 40 to 180 within the next 12 months and they are expecting volume to triple in 2017 as demand continues to increase for this product. “We are constantly expanding and growing,” he said.

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“Angel Oak completes $132.65 million nonprime securitization”


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