Austin, Texas-based 360 Mortgage Group just revealed that it will conduct a pilot program to test the viability of no-income, no-asset mortgage loans by originating up to $1 billion of them to finance investor-owned homes.
The housing crisis in 2008 stemmed largely from defaults on sub-prime mortgages, or so-called NINJAs – borrowers who qualified for a home loan with no income, no job and no assets verified. Lenders have since stopped making NINJA loans, but one is set to offer another version, NINA loans, to landlord borrowers without verifying their income nor their assets, according to HousingWire.
The mortgage banking firm, 360 Mortgage, calls the loan Agency NINA and will offer it to loan applicants with FICO scores as low as 620. (FICO scores below 670 brand loan applicants as sub-prime, according to Experian.)
Despite the use of “Agency” in the name of the loan, 360 Mortgage Group’s loans are not backed by government-sponsored enterprises Fannie Mae or Freddie Mac.
Andrew WeissMalik, COO at 360 Mortgage Group, told HousingWire the Agency NINA loan is a solution for residential real estate investors who “don’t fit within the highly regulated, ultra-conservative guidelines every other lender offers.”
Bank of America is also getting into sub-prime lending. Last fall, it was reported the bank was underwriting $10 billion in mortgage commitments to borrowers with non-traditional backgrounds in partnership with a nonprofit brokerage. [HousingWire] – Mike Seemuth