Over the next decade, mortgage industry players expect the non-QM space to grow significantly. That's in large part due to a rise in non-W2 borrowers in the U.S.
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Over the next decade, mortgage industry players expect the non-QM space to grow significantly. That's in large part due to a rise in non-W2 borrowers in the U.S.
"One in three workers by the end of this decade will be on 1099s or running a small business," said Nik Shah, chief executive officer at home.LLC, during IMN's third annual Non-QM Forum in California Friday. "I think the need for bank statement mortgages, 1099 mortgages will grow exponentially. It could jump to 10, 20, 30% of the entire market share over the next decade."
A shift to 30% of the mortgage market being 1099s or bank statement borrowers would be huge. And it leads to some interesting questions – namely, uh, what it would mean for Fannie Mae and Freddie Mac.
"If the non-QM borrowers become a third of the market, I'd more likely expect the agency footprint will change and grow," Chris Marazzo, a vice president at Citi, said at the conference. "They have the duty to serve to accommodate those borrowers."
LOs, what does your Magic 8 Ball say? Do you expect to see Fannie and Freddie serve 1099 and bank statement borrowers in the next decade? And would that be a welcome change? Email me your thoughts at james@hwmedia.com.
Over the next decade, the distinction between non-QM and QM loans will be blurred and the government-sponsored enterprises (GSEs) may have to accommodate the growing market of non-W2 borrowers.
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