I have said before that I believe the transition in mortgage finance will include short-term pain, mid-term adjustments, and a new era in lending. Now that the Great Recession is behind us and recovery is underway, it is time to recognize and support a very important constituency that has been left out of our economic recovery – self-employed and retired (SE&R) consumers. RPM is leading the way to a new era with our recent release of the Tailored Line of borrowing solutions. The program offers common sense loans for qualified buyers in more segments of the community. It is my sincere belief that within the next few years many other lenders will agree with RPM’s stance that SE&R communities are alive and vibrant. Serving them, as well as other uniquely qualified buyers, with secure loans, is vital to the strength of our economy and our country.
The Self-Employed & Retired Community
Are you aware that 50 percent of all jobs in the U.S. are supported by privately owned, small businesses? As a matter of fact, RPM is a family-run business that is privately owned by my wife, Tracey, and myself. The number of Americans who are 65 and older will more than double over the next 40 years, reaching 83.7 million in 2050. The Baby Boomer generation is already knocking on, and entering, the door of retirement.
Catalyst for Change
Here’s something to consider. If the self-employed and retiree population were better able to finance their home purchases, wouldn’t that lead to more home listings? More home purchases? More liquidity to help spur the economy? The new generation of wealth, the Millenials, are counting on marked economic and housing recovery to have a chance at buying their first home.
To further support my theory, I use my former neighborhood as an example of how the SE&R community has been underserved. My previous residence was located on a street with a total of nine homes. Seven of my eight neighbors were self-employed and the eighth was retired. All of them have great equity, excellent credit and very strong liquid reserves. Yet I was unable to help them refinance their homes. Why? The system did not have a program to serve the SE&R community! This was astounding to me. At RPM we set out to develop mortgage opportunities specifically designed to serve the needs of otherwise qualified buyers who have difficulty meeting a particular requirement that is counter to their unique situation. Our new Tailored Line of loan products is the result of our efforts.
Unique Solutions for Unique Buyers
The team at RPM created the Tailored Line to offer solutions that go beyond income to consider equity, assets and credit for qualified buyers who are challenged by income verification requirements. The key is looking at the big picture and assessing the buyer’s Ability to Repay (ATR). One of RPM’s new programs allows buyers with a history of self-employment to secure loans with only one year of tax returns. RPM’s Equity Reward Program offers an option for highly qualified buyers with substantial assets, considerable home equity and excellent credit, but no steady monthly income. Retirees are uniquely positioned to take advantage of this borrowing opportunity to purchase a primary or second home, or refinance their current home.
Solutions for Many
In our quest to better serve self-employed and retired customers, we were able to address other scenarios limiting other groups of qualified homebuyers. RPM’s new Asset Depletion Program empowers savvy investors with substantial savings to leverage their investment portfolio to qualify for loans without a monthly income requirement. What about Millenials? While they may fall outside of usual guidelines, they may otherwise be qualified. For young professionals with a short credit history, RPM opens up a world of opportunity for those with a FICO score of at least 660 and an interest in non-government loans.
Click here to find an RPM loan advisor near you who can tell you more about RPM’s new Tailored Line of loan products and our leadership in the new era of lending.
Written By Rob Hirt, CEO, RPM Mortgage, Inc.