"We spent a long time studying the product and the market, Sogorka said in an interview with HousingWire. When we felt like we could come out with a good product that fit the market, but also had strong underwriting guidelines, and something we could do responsibly, we rolled it out. Sogorka said Rocket designed its DSCR offering for experienced investors that have done this before. It set strong guidelines and strong pricing to target professional borrowers rather than first-time investors."
"Stacy Speas, senior vice president of operations at Cornerstone Servicing, said that business-purpose loans have grown and will continue to grow in the new year. In this case, landlords and a strong rental market are sparking demand. Although we saw some reductions in the Fed interest rates, mortgage rates, relatively speaking to what these borrowers probably have seen in prior years, especially during the pandemic, were much higher, she said. But being able to rely on that rent cash flow certainly helps those land"
Rocket designed a DSCR offering aimed at experienced investors, with strong underwriting guidelines and pricing to target professional borrowers rather than first-time investors. Early demand for the product has exceeded expectations. The DSCR loan segment has grown, with more lenders entering the space and investor appetite increasing. Homeowners locked into low rates and a growing share of self-employed and nontraditional workers have helped expand demand. Large lenders are responding after observing small and midsized lenders earning strong margins and recognizing buyers are not meaningfully riskier than non-QM borrowers. Business-purpose loans are rising as landlords and a robust rental market drive demand, and rent cash flow helps borrowers manage higher mortgage rates.
Read at www.housingwire.com
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