Angel Oak on non-QM: “We’re 90% back.”
In a metered paywall interview with the Washington Post, Angel Oak EVP Tom Hutchens explains that the non-QM market is nearly completely back on its feet after virtually shutting down when the pandemic first hit.
The private-investor-funded loans, built for the self-employed, have improved considerably since the subprime crisis. What’s different this time around is that Hutchens says advances in tech is making their job easier and most borrowers are putting at least 20% down.
“We can confirm and verify things now that we couldn't in 2006,” Hutchens said of his product. “We can find out a lot 
more about a borrower now that we maybe weren't able to tell before. The mortgage business has a lot of technologies, fraud guards and things like that just weren't available.”
Hutchens also adds that they have a different way of looking at borrower profiles that also enables their success.
“Certainly the self-employed borrower is the No. 1 non-QM borrower. They do not have credit issues but Fannie and Freddie, the agencies, they have one way of looking at income and that’s it,” he tells Kathy Orton of the WaPo. “And if you own a business, your tax returns in many cases don’t reflect your ability to pay a mortgage. That’s what we’re looking at. Are they going to pay us back? We are able [to make these loans] because we are privately funded through private capital. We’re able to look at different ways of determining someone’s ability to repay.”
Hutchens added that his business is 90 percent back.
“There are still some products that we need to wait and see where the economy goes, where the coronavirus goes and all that, but yeah we’re pretty close to where we were pre-covid,” he said.
🤣 MEME of the day by Mortgage Broker Memez 🤣
Have a funny meme? Email your favorite meme here for a chance to be featured in our next Rise&Shred.
Jamie Dimon, CEO of JPM Chase, lost a bundle during the crisis
The pandemic has been hard on us all, but take a moment to sympathize with the gazilli
onaire JPM Chase CEO Jaime Dimon (OK, so he’s only a billionaire, but that’s actually a rare feat for the typical banking CEO).
Of all the big CEOs of major financial institutions, Dimon lost the most money, by far. According to the FT, Dimon suffered paper losses of just over $100m on his shares last year, as low interest rates and high loan loss charges battered US retail banks.
JPMorgan’s earnings for the first nine months were 39 percent lower than a year earlier, even as its investment bank benefited from buoyant market conditions.
This is due to the bank being more heavily involved on the retail side of financing; as regular Americans took hits to the wallet, so did Chase bank and, therefore, Dimon. The CEOs of BofA, Citi, Wells also lost money, but in the low tens of millions, according to the FT’s count, which is derived via review of SEC disclosures.
CEO of financial firms with big investment banking operations profited nicely, by way of comparison. Jeffries Group CEO Rich Handler made the biggest paper gain of Wall Street chief executives. The value of his shares rose almost $54m in a year when his bank’s share price gained 14.5 percent.
In other Chase news, the bank noted that it’s older clients are adapting to digital banking just as well as everyone else. So age is not a barrier to technological access, as once thought.
Allison Beer, Head of Digital at Chase, revealed that the banking institution had to accommodate a significantly higher volume of digital users in 2020. In statements shared with Business Insider , Beer noted that customers across all different age groups are now banking online a lot more frequently than before the COVID crisis began. Beer revealed that half of the bank’s “digitally active” clients are over the age of 50.
🔥 Weekly Rise&Shred – Episode 001 🔥Â
With Josh Pitts & Jacob Gaffney
China limits bank lending; Canadian banks spread the love
After a rocky start to the year because of the Covid-19 pandemic, the housing markets in China’s largest cities have been on fire, with $1.4 trillion invested between June 2019 and June 2020. Housing prices have jumped, and buyers are snapping up properties at record rates.
Sound familiar? Like in the US, there is talk of a housing bubble. But China is dealing with it in an unusual way: they’re limiting the amount banks can lend on property in order to cool down the market (source: Bloomberg, metered paywall).
The new regulations, issued along with the China Banking and Insurance Regulatory Commission, call for limiting 
loans to developers to 40 percent for state-owned lenders, while mortgages can make up no more than 32.5 percent of a bank’s outstanding credit. The new regulations took effect on Jan. 1.
Unlike the big banks in the US, whose CEOs lost money during the pandemic, the big banks of Canada have their employee’s best interests in mind and know how to reward their hard work. BONUSES!!!
The Royal Bank of Canada said it will offer bonuses to recognize everything its staff has done to support each other, their clients and their communities in a tough year.
The Toronto-based bank decided to give bonuses after “considering the external environment and the long-term interests of shareholders and employees,” said spokesperson Andre Roberts.
“This year, RBC’s overall performance was impacted by the unprecedented challenges brought on by the global pandemic and while year-end results were down year-over-year, our performance demonstrated the strength, stability and operational resilience of our franchise,” he said.
Fellow banks — TD Bank Group, Canadian Imperial Bank of Commerce and Bank of Montreal — also said they will be paying bonuses.
Spread the Rise&Shred ❤️ and share with a friend
