U.S. housing market was transformed when the government took control over the mortgage lending industry. The Dodd–Frank Wall Street Reform and Consumer Protection Act sought to oversee all aspects of home financing in order to prevent another market collapse and tighten regulations so that vulnerable buyers would be protected. While reform measures seemed fair in theory, and indeed necessary in some aspects, in practice there were a few fundamental flaws and long-term consequences to home owners/buyers and residential lenders.


But Dodd-Frank did not only affect lenders. It affected borrowers too. One negative consequence of the Ability to Repay rule (ATR) that has become more significant in the past few years is the huge segment of the population now completely shut out of lending. These home owners and potential home buyers are not subprime loans, either. They are largely the self-employed and small business owners who can prove they are reliable earners. Now many of them find they are suddenly unable to be considered for a QM loan, to buy or even refinance a home they have made regular, timely payments on for years. And why not? Because they are not traditional wage-earners. Without a W2, they cannot comply with underwriting requirements, no matter how much money they may have in the bank. This could be one reason why more homes have been paid for in cash in the past few years, in spite of some of the lowest interest rates in history. Who buys homes for cash? It’s not just investors. It’s also the freelancers and independent contractors, the small business owners, and those who work side-gigs to supplement their income (but can’t count the extra income as buying power) who also cannot qualify for a QM loan, much of the new and growing workforce.


The good news is that new lending products, flexible, innovative, and accommodating, designed to not only serve high-income professionals, but many other types of borrowers as well, borrowers who might not fit inside a neat, are now available. Lincoln Mortgage, has joined forces with PCMA, the non-bank private client lending innovator, both headquartered in South Orange County, offering personalized lending solutions to accommodate the needs of mass affluent and high net worth clients in the purchase or refinance of primary residence, investment properties and second homes. We understand the unique needs and expectations of these accomplished and experienced clients and have access to a proprietary Private Client credit portfolio along with a unique blend of Private Client Flexibility and Concierge Services that allow us to deliver a bespoke lending experience to meet those needs with a more sophisticated approach using methods such as cash flow analysis on operating business income, asset utilization lending on qualified pledged assets, and cross collateralization to secure investor interest, along with many other methods to determine credit risk.

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