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Lender adjusts LTV ratios in response to market

Lender has seen its share of market downturns

The Hollywood, Fla.-based firm founded in 2005 has been in the non-QM space for more than a decade, Pearson noted. Yet the scope of enhancements is believed to be the first major tune-up of its products. 

“We do updates from time to time,” he said. “This has been the first time in a little while that there’s been a really strong, aggressive improvement. A lot of us across the industry have been kind of waiting to see how the market is going to shift and how things are going to land. So we have been slowly doing price improvements on certain performing products and things like that. But as far as a major enhancement of guidelines, this has been one of the larger ones I’ve seen in a little while.”

It’s not an altruistic exercise to get more people homes, but one prompted by the current softened market. Pearson noted A&D Mortgage has seen its share of market turns since its inception just before the Great Recession, and has reacted accordingly to mitigate losses. 

“We’ve been through two or three of these turns,” he said. “We’re very astute because we’re not only just selling a product – we’re securitizing, we’re servicing these loans. So it’s more than just selling a product and moving on. We hold on to these – we house them, we service them, we bulk-sell them – we do all the work so we have to keep a close eye on performance.

“That’s why you will see us adjusting and fine-tuning to the market and making adjustments like this,” Pearson said. “It’s a pretty good sign of where the market is overall and how we’re navigating through it.”

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