With current market conditions having a negative impact on traditional agency loans, expanding into non-QM products can allow brokers to grow their business and reach a wider borrower pool. But what’s the best way for brokers to market themselves to reach that wider, non-QM audience?
According to Hitz Mistry, chief marketing officer at Acra Lending, brokers offering non-QM products should market themselves as solution providers and choose the right lender partner to help them achieve their goals.
Why a solution provider? Because “that’s effectively what a broker becomes when entering the non-QM space,” Mistry said. “When you bring a borrower to an agency lender, the agency lender tries to fit the borrower into a box; if the borrower doesn’t fit in the box, then the borrower is denied.”
“But, with a non-QM lender, it’s more like a puzzle,” he continued. “Instead of trying to fit borrowers into a box, non-QM lenders have a unique flexibility built into their underwriting guidelines that allows them to use alternative methods to find the right solution based on individual needs.” No box required.
Choosing the right lender partner
If you’re a broker interested in expanding to non-QM and positioning yourself as a solution provider, what’s the first step?
“If you’re going to enter non-QM, you have to partner with the right lender,” Mistry said. “Most people will tell you that it’s important to understand the underwriting guidelines, and it is, but I’d say partnering with the right non-QM lender is more important.”
The right lender partner will offer its brokers valuable resources, such as dedicated support, education and training on non-QM products. The best non-QM lenders walk brokers through every step of their non-QM process and even offer marketing materials that they have created that brokers can leverage for their own white labeling purposes.
“Having a program without providing support to your brokers on how to market [it] would be like me selling you a phone without instructions on how to use it.” Mistry said.
The expertise and opportunity provided by an experienced non-QM lender partner for new brokers is extremely advantageous for brokers entering and working in the non-QM space and, in Mistry’s opinion, vital for a new broker’s success.
Beyond marketing yourself as a solution provider, the other piece of the non-QM puzzle for brokers is effective, strategic marketing.
Flexibility is key — the non-QM market is constantly changing, as are rules, regulations and loan qualifications. Brokers will need to adjust their marketing efforts and keep them fluid as changes are made to programs and services to meet the needs of investors and borrowers.
“Marketing techniques and strategies will also need to be adaptable to changing borrower habits and expectations,” Mistry noted.
“Traditional marketing techniques — though still important — need to be supplemented with new ways to reach your target audience and make information easily available,” he said.
As the use of technology increases in daily life, borrowers are also increasing their use of social media to research loan information. To make the most of this emerging opportunity, brokers need to be available and interactive online and familiar with how to use these technologies most effectively to increase brand and program awareness.
Targeted campaigns using a multi-channel approach — i.e., print, email, social media, etc., — can be extremely useful, but brokers should focus on the response to their messaging and adjust accordingly to get the most out of targeted campaigns. To do this, brokers should note (i) the messaging that was used; (ii) the targeted audience parameters that were chosen; (iii) who is reacting to the message and how; and (iv) adjust the message and/or audience parameters to increase the results to determine what types of messaging will be the most successful. Adjusting to what the data shows is key to getting the most out of targeted advertising.
Partnering with Acra Lending
For brokers interested in working with non-QM products, Acra Lending can serve as a valuable lender partner.
After signing Acra’s Broker Agreement, the first step Acra Lending takes when working with brokers is education — making sure brokers understand its program offerings and underwriting guidelines to help determine the best-fitting borrower for those loan programs.
“If we’re providing a program, we want you to understand it,” Mistry said.
Acra Lending is communicative when brokers have questions on programs or marketing and even provides white label marketing services brokers can use. Acra creates the marketing collateral based on Acra’s current non-QM program offerings and makes such collateral available to its broker partners for their marketing purposes. The collateral is easily accessible, up-to-date and can be adjusted to include broker’s branding and contact details.
“If brokers haven’t already added non-QM to their program offerings, this is the time to start,” Mistry said. To get started as a broker in the non-QM space, contact Acra Lending today.
For more information on working with Acra Lending, click here.