Newfi rolls out non-QM correspondent channel

Newfi, a non-qualified mortgage lender based in Emeryville, Calif., has entered the correspondent channel, adding to its existing wholesale and consumer direct business.

This channel will offer mortgage bankers the Sequoia Portfolio Non-QM product suite, where the loan amounts are up to $5 million and multiple income types are accepted — including full documentation, bank statement, 1099 and asset depletion.

Other non-QM loans will also be available, including those underwritten using debt service coverage ratios.

Newfi provides "a unique opportunity" for whole loan sellers when it comes to execution because of its affiliation with Apollo Global Management, CEO Steve Abreu said in an interview.

Because of the specialization in the non-qualified mortgage segment, this year's exits of Wells Fargo and First Republic did not play a part in the decision to start this channel, he noted.

The ties with Apollo support Newfi's ability to offer these loans. "I have liquidity," said Abreu. "I'm not dependent on the securitization market to execute, which makes us a lot more different than the other non-QM aggregators in the marketplace."

Newfi's correspondent channel allows for non-delegated underwriting, delegated underwriting and mini-bulk deliveries of loans.

"Mortgage bankers are looking for other product types," Abreu said. "This business is definitely growing and it just gives us a more unique opportunity to grow the company."

Newfi's correspondent business has its own sales staff, which it is still looking to grow, and it already has begun to purchase non-QM loans. Its technology is what is going to be the differentiator when it comes to this marketplace, he added.