Introduction

In 2024, Rate originated approximately $2.8 billion in non-QM loans, a segment identified by President Shant Banosian as holding great potential for growth. The company is aiming to double its non-QM volume by 2025, targeting a future where these products account for nearly 20% of its overall mortgage production.

Commitment to Non-QM Products

Banosian emphasizes a strong commitment to non-QM offerings, stating, “Our ultimate goal is to double our non-QM business in 2025 and eventually have it become almost 20% of our production here at Rate.” His own experiences reflect this commitment, as non-QM products constituted about 10% of his personal production in the past year.

Innovative Product Offerings

Rate has introduced several innovative products designed to meet the needs of borrowers who may not fit into conventional lending frameworks:

• Self-Employed Borrowers: Allows flexible documentation, requiring only one year of income verification through business cash-flow statements or 1099 forms.
• Asset-Based Qualification: Enables borrowers to qualify solely based on assets, including retirement accounts and investment portfolios, without needing to liquidate these assets.
• Investor-Focused Loans: Offers qualification based on property cash flow, requiring a minimum debt-service coverage ratio of 1.0, without needing tax returns.
• Buy Before You Sell Program: Facilitates making offers on new homes without first selling the current residence, though standard appraisal and credit score requirements still apply.

Industry Perspective

Kate Amor, Executive Vice President and head of enterprise products, notes that these offerings provide “common-sense financing options” that were not previously available through traditional channels. Banosian also addresses misconceptions, stating, “the biggest misconception is that these loans are more difficult to originate and take longer.” He confirms that a non-QM loan can be processed in as few as seven days.

Competitive Pricing Strategy

Banosian has outlined that Rate aims to maintain competitive pricing while ensuring scalability in its distribution model. “We want to be super competitive on the front end from a pricing standpoint,” he said, reaffirming the company’s commitment to industry leadership.

Current Operations

As of recent figures, Rate has 2,187 sponsored loan officers across 479 active branches, indicating a robust operational presence within the mortgage landscape.