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5 housing trends for summer 2014

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Creative, non-QM mortgages emerge
Creative, non-QM types of mortgages emerge © nito/Shutterstock.com

Creative, non-QM mortgages emerge

When new mortgage regulations were implemented this year, many lenders said they would not lend outside the guidelines provided by the Consumer Financial Protection Bureau's qualified mortgage rule, or QM.

They said it would be challenging for many borrowers to be able to get approved for a home loan once the rules went into effect.

Loans that meet QM's requirement offer lenders a certain level of protection against borrowers' lawsuits. But now that lenders are slowly becoming more comfortable with the rules, some are once again offering creative loans that don't meet QM requirements.

Lenders seize opportunity

"There are some places offering non-QM loans," says John Walsh, president of Total Mortgage Services in Milford, Connecticut. "I think you will see more investors enter that space because there is an opportunity there."

Borrowers usually don't know whether or not they are getting a loan that meets QM requirements unless they are told they can't get a loan because of new regulations and the lender explains the details. But it is helpful for certain borrowers, including some who are self-employed and those seeking larger loans, to have access to lenders that go outside the QM lending box.

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