Module 4:
Deal Killers
Learn how to identify the issues that routinely derail otherwise workable Non-QM transactions.
Most Non-QM Loans Don't Die Because of Income
One of the biggest misconceptions in Non-QM lending is that income is the primary reason loans fail.
In reality, many transactions are approved from an income perspective but run into problems later in the process.
The most successful Non-QM originators identify potential issues before the file is submitted.
That allows them to maintain control of the transaction and avoid surprises for borrowers, referral partners, and processors.
The Cost of Missing a Deal Killer
Deal Killers that are discovered late are extremely disruptive to your ability to deliver to your borrower.
What can happen?
✓ Closing dates get missed
✓ Borrowers become frustrated
✓ Referral relationships suffer
✓ Additional conditions appear
✓ Files become difficult to manage
These are often guideline challenges, not income challenges.
Three Categories of Deal Killers
Borrower Issues
Credit events, undisclosed liabilities, occupancy concerns, reserve shortages, and borrower profile concerns.
Documentation Issues
Missing documentation, unverifiable deposits, source of funds concerns, and incomplete financial records.
Property & Transaction Issues
Property eligibility, vesting concerns, appraisal issues, title concerns, and transaction structure problems.
The Non-QM Gold Mindset
The goal is not to find reasons to decline a file.
The goal is to identify issues early enough to solve them.
Every experienced Non-QM producer eventually learns the same lesson:
Problems are rarely fatal when discovered early.
Problems become fatal when discovered late.
Coaching Note:
Problems discovered early are manageable. Problems discovered by underwriting are disruptive.
Your job is not to submit quickly. Your job is to submit intelligently.
Before Moving Forward:
In the next section, we'll review the borrower and documentation issues that most commonly create challenges in Non-QM lending.