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There’s a new player in non-qualified mortgage lending — Nashville, Tennessee-based Defy Mortgage LLC, which says it will specialize in providing home loans to entrepreneurs and gig workers with alternative forms of income and assets including cryptocurrency.
For the moment, Defy Mortgage is only providing home loans in five states: Colorado, Florida, Oregon, Tennessee and Texas. But the plan is to “quickly expand” to all 50 states.
The company says it will focus specifically on “consumers that have embraced alternative forms of income. With the rise of the gig economy, Defy takes a holistic approach to evaluating a homebuyer’s entire asset portfolio including cryptocurrency and bitcoin.”
Employing a “decentralized origination model” to evaluate borrowers’ assets, Defy Mortgage says it will provide access to “mortgage options they previously have not had available to them.”
Stephen Light
Cofounders Todd Orlando (CEO) and Stephen Light (chairman) have experience in banking and information technology.
In addition to co-founding ServiceNow partners GlideFast Consulting and Pharicode, Light lists management roles at information technology services and consulting firm SAIC on his LinkedIn bio.
Orlando is a managing partner at Inntum Financial and has worked in private banking at Morgan Stanley and First Republic Bank, according to his LinkedIn profile.
Todd Orlando
“In the wake of a global economic shift in employee preference to work remotely, Defy Mortgage recognizes the need for an innovative, more transparent and open way to lend money to consumers with alternative forms of income,” Orlando said in a statement. “We are the best resource for entrepreneurs and solopreneurs to secure a mortgage loan supported by various forms of collateral.”
Last year’s rapid rise in mortgage rates caused difficulties for lenders offering “non-QM” loans not eligible for purchase by Fannie Mae and Freddie Mac. Many non-QM lenders were forced to sell loans to investors at a loss and some went out of business. With mortgage rates stabilizing in recent months, non-QM loans continue to be popular with borrowers who don’t qualify for conventional loans.
While Defy Mortgage is starting out small — according to the Nationwide Multistate Licensing System, the company currently sponsors two mortgage loan originators — its founders see a bigger opportunity.
“Millions of potential homeowners are sidelined because their income is not recognized as traditional,” the company said in an announcement Tuesday. “Mortgage lending standards are antiquated and most mortgage lenders have not adjusted to the shift from a single income stream to multiple forms of income. Defy Mortgage understands that consumers are working independently and seeking financial flexibility more than ever before.”
Although Defy Mortgage plans to specialize in non-QM loans, it’s also offering conforming, FHA, jumbo and construction loans, as well as home equity lines of credit (HELOCs) and refinancing.
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