“Borrowers with a 700 FICO score, but they need to qualify using bank statements instead of traditional tax returns, otherwise it’s a perfectly good deal,” he said. “They’ve got great credit, they’ve got good LTV, they’ve got a good DTI, everything is great. The insurance companies are saying, ‘Hey, that’s a really good loan, and I’m willing to pay top dollar for that loan.”
Because these good loans are drawing more interest from these investment companies, the competition for these mortgages is forcing rates down for well-qualified borrowers, at a time when market conditions are keeping rates elevated on conventional mortgage loans.
Melissa Cohn of William Raveis Mortgage says mortgage buyers are in limbo as tariffs and rate uncertainty cloud the market. With Fed cuts likely delayed, the second half of 2025 may fall short of expectationshttps://t.co/rLNYRvwp5F
— Mortgage Professional America Magazine (@MPAMagazineUS) May 8, 2025
“That’s the part that is interesting,” Smith said. “You’re seeing for the very good borrowers, rates are moving downward because there are investors entering the space. Meanwhile, the tougher borrowers, the 600 or 620 credit scores, the recent bankruptcies, those rates have been moving upward, because there’s less investors interested in those.
“it’s been interesting to watch the market kind of create this left versus right sort of dichotomy of one side getting better, one side getting worse.”
A lot of new entrants in the non-QM space
Acra Lending is coming off a record month, with $432 million funded in April. It’s another sign that the non-QM space continues to roll along, even with market volatility.