Why Non-QM S hould B e P art O f Y our O rigination M ix

1. Why Non-QM Should Be Part Of Your Origination Mix John Jeanmonod | Regional Sales Manager November 1, 2018 Grow With the Leader in Non-QM Wholesale and Correspondent Lending.

2. Outline Conclusion Introduction What How Where Differentiate Yourself Angel Oak Mortgage Solutions What does alternative lending mean today exactly? How can non-QM help you close more loans? Where can you find non-QM borrowers?

3. Angel Oak Mortgage Solutions Who We Are.

4. Who Is Angel Oak Mortgage Solutions? Customer Service Comes First Vertically Integrated • Our funds buy our loans Securitizing Non-QM • 8 securitizations totaling $2B • AAA rated Market Leader since 2013 • Specializing only in non-Agency and non-QM • Access to U/W’s • Common sense approach to U/W • Intuitive and simple website • Local representation • Committed to communicating proper expectations Non-QM Wholesale andCorrespondent Lender • 42: Licensed states • 2600+: Approved brokers/ correspondents • 8000: Loans originated over 5 years The largest nonbank originator of non-QM

5. What Is Alternative Lending And What Does It Mean Today?

6. What Does Non-QM Mean Today? 2006 2018 2006 2018 Proof of Income Credit Score ü 580 680 ü ü ü Oversight and Regulation Down Payment $ $ ? $ $ $ Not The Old Subprime

7. What is the Potential for Alternative Lending? Agency vs. Non-agency Issuance

8. Non-QM Performance “Of the 4.3 billion and roughly 11,000 loans securitized since 2015 where loan-level performance data is publicly available, only 8 loans have entered foreclosure.” Fitch, U.S. RMBS Monthly Update, March 2018

9. Huge Potential For Closing More Loans 15 million+ Number of self-employed borrowers in the United States 1.5 million+ Number of foreclosure filings from past 2 years 680 Over 50% of households have a credit score under 680 620 33% of households have a credit score under 620 > 90% Percent of conventional loans outstanding with no strong incentive for a rate/term refinance 18 million+ Number of foreclosure filings since the financial crisis began in 2008

10. Buyers Who Were Rejected By AMortgage Lender Reasons Mortgage Application was Rejected 29% Debttoincome ratio 23% Lowcreditscore Insufficientdownpayment 11% 11% Not enough moneyinreserves 10% Income was unable to be verified Too soon after refinancinganotherproperty 1% 2017 Profile of Home Buyers andSellers 0% 20% 40%

11. Why Originate Non-QM Loans? Be the Stand-Out Resource • Differentiate yourself • Realtors • Borrowers • Do the loans your competitors don’t know how to do • (Before they learn how…) Increase Your Earnings • Save Agency fall-out loans • Strengthen relationships for more referrals • 2 for 1

12. How Can Non-QM Loans Help You Close More Loans? Stop turning down loans that make sense. Keep doing Agency lending; non-Agency loans are a simple add to your income.

13. Purchase Originations On The Rise Mortgage Bankers Association. (October, 17, 2017) Chart of the Week – Mortgage Originations: 2011-2020. Available from www.mba.org.

14. Underserved Markets / Potential Borrowers Investors/ Foreign Nationals? Self-employed? Bankruptcy/Foreclosure? Low credit scores? Asset qualification? *Ask us for our Program Highlights flyer

15. Why Does This Matter? What would you do with an extra $60K? (1 loan per month) x (Portfolio average loan amount) = $500K = $6M in production How do you get that extra loan?

16. Sound Familiar? Are you losing out on closing deals because borrowers are self-employed? Quick scenario: Self-employed borrower makes $200K/year, credit score of 758. He writes off 75% of his income. Now he’s left with $50K trying to qualify for a jumbo loan…and he doesn’t qualify. Because of our Bank Statement program, we approved the borrower for a $750K loan. Borrower got the keys, seller got their proceeds and everyone went home happy!

17. Sound Familiar? Are you losing out on closing deals because borrowers have credit issues? Quick scenario: Client was forced to push the closing date back due to the IRS not clearing a tax lien. The score dropped from a 684 to a 614 on a $424K loan. Most lenders would have to deny the loan as the minimum credit score is 620 for conventional financing. Fortunately, we have non-QM products for this exact scenario so we closed the loan! Borrower got the keys, seller got their proceeds and everyone went home happy! Read about a similar scenario in The Wall Street Journal.

18. Sound Familiar? Are you losing out on closing deals because borrowers had a recent credit event? Quick scenario: Last week we closed on a $1,300,000 home for a family that was turned down by two other lenders due to a foreclosure that occurred 2 years ago. Our non-QM programs require as little as 1 day seasoning on foreclosures so we were able to originate, process and close in 21 days. We enabled this grateful family to move into their dream home just in time for the holidays.

19. Sound Familiar? Are you losing out on closing deals because borrowers cannot qualify? Quick scenario: A borrower recently sold their multimillion dollar business. She started a new business less than two years ago and so when she tried to qualify for a loan, it was rejected since she didn’t have a long enough self-employment history. Her plans of moving into her dream home were almost derailed. Because of our Asset Qualifier program, we approved the borrower and closed the loan.

20. Sound Familiar? Are you losing out on closing deals because borrowers are investors? Quick scenario: An investor is looking to purchase his 19th investment home. His prior funding was very costly because it was hard money with high rates and fees. He was unable to qualify for a mortgage using tax returns. After a rental analysis was completed, he was able to qualify using the Investor Cash Flow program. The investor was able to purchase his 19th home.

21. Sound Familiar? We were able to save these loans because non-QM serves these types of borrowers: • Self-employed with significant write-offs • Credit scores below conventional/jumbo requirements • Recent credit events • Borrowers with significant assets • Investor specific programs

22. Where Can You Find More Non-QM Borrowers? • Realtors • Other LOs (Large banks, credit unions) • Builders and Developers • Accountants, Financial Planners • Bankruptcy Attorneys Let your referral partners know you can access these loans… They will do the work for you!

23. Market Yourself Asset Qualifier An Asset Qualifier Program is the perfect solution for borrowers with high net worth and significant assets. If you have creditworthy clients that do not qualify for traditional loans due to no employment, no income or high DTI then this solution can help you get them into the home of their dreams. Investor Cash Flow Are you a real estate investor looking to grow your portfolio? Our Investor Cash Flow program is designed specifically to serve your real estate investment goals. This program allows you to qualify based on rental analysis to determine property cash flow. Bank Statement Self-employed borrowers can have a challenging time qualifying for a traditional home loan. But you don’t have to worry about there not being a program available for your client to qualify for a mortgage. Bank Statement programs are designed specifically for those who do not have the tax documents-2’s Just Missed for Brokers/Correspondents Stop losing your “just missed” clients to your competition. Non-QM alternative mortgage solutions offers customized mortgage products that best fits your client’s circumstances. Place borrowers with solid incomes and low credit risk into homes utilizing products such as bank statement programs

24. Get Answers In Seconds • Try our Quick Quote tool • Get potential loan details immediately • Prequalify borrowers in real time www.angeloakms.com/quickquote

25. Key Takeaways In Choosing a Non-QM Lender • First class service • Non-Agency specialists • Provides robust resources • Years of experience

26. Differentiate Yourself "Rob, is any lender making money out there?" Well, what's the old "joke?" "How do you get $5 million in the mortgage biz? Start with $10 million!" Not so funny when it's real. Few companies are prospering, and what I hear more is, "We hope to outlast our competition by cutting costs and since we have deeper pockets." Does that mean whichever company can lose more will outlast the others? Any lender making money deserves a big "congratulations" because it is very rough out there, whether it is margins, higher rates & volatility, seasonal factors, production staff not wanting to make moves until after year-end, whatever. And it is a lot easier to be a manager when your company is expanding than when you're contracting. “Any lender making money deserves a big ‘congratulations’ because it is very rough out there, whether it is margins, higher rates & volatility, seasonal factors, production staff not wanting to make moves until after year-end, whatever.” —Rob Chrisman October 2018

27. Questions & Answers Are non-QM loans “harder” to close? How do you sell the rate?

28. Grow your business by utilizing non-QM John Jeanmonod | Regional Sales ManagerJohn.Jeanmonod@AngelOakMS.com | 214-683-6096 www.angeloakms.com Questions? Visit our booth, 312/314 | info@angeloakms.com