NewRez resumes non-QM lending after pandemic pause

After putting non-qualified mortgage lending on hold at the onset of the pandemic, NewRez has reactivated that platform.

Non-QM lending could see an uptick in 2021, alongside an expected boost to the prime jumbo mortgage business. With the qualified mortgage parameters and the Ability-to-Repay rule expanded by the CFPB in December, a larger group of borrowers have the potential to be approved for a home loan.

“As we look ahead to a healthy and growing non-Agency and non-QM market, we are excited to provide options to highly qualified and strong borrowers that sit outside the traditional Agency guidelines,” Baron Silverstein, president of NewRez, said in a press release.

NewRez wouldn’t comment on specifics around the timing of its relaunch but the tailwinds from the election indicate the possibilities for heightened non-QM activity. The Biden Administration made clear that increasing the homeownership rate — especially at the low end of the market — is a pillar of its plan for housing and lending.

Non-QM volume accounted for about $900 million of NewRez’s $7.2 billion total in 2018 and $1.5 billion of 2019’s $22.3 billion. It produced nearly $400 million in non-QM volume in the first quarter of 2020 before pausing the product offering in March due to the coronavirus.

NewRez, the mortgage subsidiary of New Residential Investment, followed the trend of lenders going public in the midst of a hot market and filed its IPO on Nov. 20, 2020.