Leveraging the No-Doc Niche

• What is the borrower trying to accomplish? Does the borrower fall into one of the categories above? If the borrower has good credit, income, etc, then other lending programs are better suited for the borrower since they will be able to achieve better rates and terms.

• Is there enough equity in the property (for a refi), or does the borrower have ample cash for the down payment? Most No-doc lenders cap their loan to value at (60-65% of the value of the property)? If the borrowers don’t have 30-40% equity (or cash on a purchase), then most no-doc lenders would be unable to assist.

Many fall out of traditional sub-prime lending guidelines. The key to profit from the no-doc segment is properly identifying and targeting the borrowers that fit the five items above. A couple key clients to target to get more no doc loans:

• Small to mid size banks: many times these banks have loans that they need to get off their books (credit issues, payment issues, etc..)

• Attorneys: they are often aware of clients that have issues with the IRS, local taxing authorities, etc… and are in need of cash quickly to rectify the situation.

• Real Estate Agents: frequently they have clients that are in need of money to close a deal quickly or they have clients that have substantial cash from a prior transaction and their credit is poor.

• Other brokers/bankers: many times brokers/bankers only specialize in prime lending and are unwilling to venture into the no-doc arena, and yet they see deals everyday that fall out of the prime lending requirements

No-Doc loans are a key tool in the well-rounded mortgage broker’s belt. Once one understands how to identify and target clients that fit this category, one can truly leverage the no-doc niche to substantially increase profits.