A Non QM Lender goes out of business, what is going on?

DDA Mortgage • July 11, 2022

The closing of Sprout Mortgage may be a cannery in the coal mine or a story of a Non-QM lender that took on too much. To better understand what this means as a signal, you want to pay attention to a few things.


  • Did the company try to sell in bulk to a security and maybe could not get the pricing they needed?


  • Were they losing share to QM lenders who can do better underwriting and pricing which makes them more competitive?


  • Was the company undercapitalized or had poor assets?


  • Were they over-leveraged in some way and got into trouble when interest rates went up again after being at historic lows for years?


We don't know the answers to these questions yet, but we do know this closing is significant because of what we experienced in 2008. Securities, lender competition, undercapitalized lenders, and over-leveraged companies were just a few things that led to the 2008 collapse; however, 2022 is different.


The demand in the housing market is coming from more homebuyers and fewer investors than it did in 2008 according to Investorplace. The subprime market is not as big, and the regulations put in place after 2008 have made it more difficult for people to overextend themselves when buying a home.


The housing market in 2022 is also much more stable than it was in 2008. In fact, it's entirely possible that prices will stabilize and continue to rise slightly unlike in 2008 when there was a sharp decline that incentivized homeowners to walk away from their mortgages. Unfortunately, we don't have a crystal ball, so this is all yet to be seen.


One thing we can expect going forward is potentially tighter credit standards for Non-QM loans as well as higher interest rates which will make it tougher for anyone who wants to buy investment properties (not only non-QM).


The lesson to be learned from this is you need a mortgage broker! Mortgage brokers can help navigate any lending problems and have access to multiple lenders, multiple products, and lots of options to ensure you get the best terms at the best rate.


If you would like to speak to a Mortgage advisor, give us a call (727) 784-5555. Or use our form below to ask a question.

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Trigger leads bill advances to the House

By Didier Malagies • June 12, 2025
The federal bill that seeks to eliminate abusive trigger leads took a major step forward this week, advancing in the U.S. House of Representatives and reigniting hopes across the mortgage industry that it could soon become law. Yes, that's an important development for the mortgage and consumer protection landscape. The federal bill to eliminate abusive trigger leads recently advanced in the U.S. House of Representatives , which is a significant step toward potentially becoming law. Here’s what this means: 🔍 What Are Trigger Leads? When a consumer applies for a mortgage and a credit inquiry is made, credit bureaus can sell that information to other lenders. These are known as trigger leads . While legal, they often result in a flood of unsolicited calls or offers from competing lenders — many of which may be misleading or aggressive. 🏛️ About the Bill The legislation seeks to ban or strictly limit the use of trigger leads unless the consumer explicitly consents. It aims to: Protect consumers from confusing or predatory offers . Curb misleading solicitations that impersonate the original lender. Improve privacy and control over a borrower’s financial data. 🏠 Industry Reaction The mortgage industry and consumer advocacy groups have largely welcomed the move, arguing that trigger leads: Cause consumer confusion. Undermine trust in legitimate lenders. Lead to identity theft or fraud in some cases. 📅 What’s Next? The bill now moves to the Senate , where it will need to pass before reaching the President’s desk. Industry stakeholders are pushing for bipartisan support, noting the broad agreement on consumer protection. 

What are all the mortgage programs we offer

By Didier Malagies • June 9, 2025
We offer 2nd mortgages on primary, secondary, and investment properties we do purchases or refinances on Conventional, FHA, VA, and Non- Qm mortgages, We do Reverse Mortgages, Construction Permanent loans, FHA203k, and Conventional Renovation loans. Let me know how we can help you or someone you know tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329

How will AI integrate with mortgages

By Didier Malagies • June 5, 2025
✅ What AI Will Do in Mortgages: Speed Up Approvals & Underwriting: AI can instantly verify income, assets, and credit. It reduces manual errors and shortens approval time from days to hours. Enhance Risk Assessment: Lenders use AI to evaluate risk more precisely, especially for non-traditional borrowers (e.g., gig workers, freelancers). Improve Customer Experience: Chatbots and virtual assistants handle common questions 24/7. Personalized loan options and real-time updates via apps or portals. Detect Fraud: AI is excellent at spotting red flags in documentation or transaction patterns. Automate Paperwork: AI can auto-fill forms, read legal documents, and streamline disclosures. ❌ What AI Won’t Do (Yet): Replace Human Loan Officers Entirely: Borrowers still want a human guide for major financial decisions. Emotional support, judgment calls, and trust still require human touch. Understand Complex Situations Fully: Edge cases like self-employed income, family co-borrowers, or mixed credit histories need human interpretation. Replace Regulatory Oversight: Compliance and legal accountability still rely on humans to interpret nuanced and changing rules. 🔮 Looking Ahead: Hybrid mortgage models (AI + human advisors) are becoming the norm. Lenders that use AI wisely will be faster, cheaper, and more customer-friendly. Borrowers may not realize how much AI is helping behind the scenes. 
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