Citadel Servicing Corp. is planning to boost its monthly originations of non-QM loans in the next six months with the help of new incentives to borrowers and brokers, according to CEO Daniel Perl.
The lender known for its non-prime non-QM products is targeting originations of USD 125m–USD 150m per month, compared with levels in the mid USD 80m area currently, he said.
Among the incentives, Citadel has lowered interest rates by a quarter percentage point across all of its products, he said. The drop brings the total decline to about a half point from a year ago, he added.
Current rates for non-prime wholesale products run as low as 4.875% to borrowers with Fico scores of at least 700 and where the loans represent no more than a 50% loan-to-value ratio, according to Citadel’s rate sheet. Rates ratchet to as high as 8.5% for borrowers with Ficos as low as 500 and on loans representing LTVs up to 65%.
For brokers, Citadel will increase the optional lender paid compensation to 2 points from 1.25 points, he said.
Other non-prime, non-QM lenders have also reported an uptick in lending to borrowers that fall outside of government lending guidelines. Last month, Angel Oak lenders said they would surpass USD 1bn in non-QM originations by year end as they enter new markets, hire new employees and add loan products, according to a company press release.
Citadel is also investing in its operations. Next month, it will open a 10,000 sq ft servicing facility, Perl said.
Impac Mortgage Holdings’ non-QM — but not non-prime — originations increased to USD 232.5m in 2Q17 from USD 184.3m in 1Q17 and USD 289.6m for all of 2016, as reported.
by Al Yoon