Deephaven uses a set of alternative documentation programs to evaluate a Non-QM borrower’s ability to repay a loan. For example, we can use 12-24 months of bank statements to verify a self-employed borrower has adequate cash flow and reserves. Or, on a DSCR loan for procuring a rental property, we can do a cash flow analysis of the monthly rent, as well as a bank statement review, to make sure the terms of the loan are appropriate and that the borrower will be able to keep up with the payments.
These solutions are straightforward. Our dose of ingenuity comes from how we look at our service delivery. While most models are built around standardizing borrowers and their financials, ours is built around flexibility. The fact is, every borrower’s specific financial situation is a little different. Perhaps one has had a credit event in the past. Or, maybe another runs a business with highly seasonal cash-flow dependencies. There is a seemingly infinite number of variables that may impact the underwriting solution.
Deephaven addresses this in two ways. First, our underwriters are in-house. We use our own team of seasoned professionals who share, on average, 10+ years of Non-QM experience. This allows them to apply all that wisdom and common sense they’ve accrued to each individual’s financial situation and to make exceptions when merited.
Second, we’ve established a Scenario Desk that gives brokers a direct line to our underwriters. This simple advantage in service delivery not only allows brokers to ask questions and work collaboratively with underwriting; it encourages brokers to bring loans to us, even if they think they may be problematic.
It’s a classic case of sometimes the most impactful ideas are also the simplest to implement. Yes, our Scenario Desk was an investment and it requires our underwriters to be up front and center with our brokers, but it has paid dividends. They tell us they feel we truly care about their business and every one of their borrowers.