Non-QM Leadership and Acquisition ft. Edward Powell

Salutations from The MikedUp Show! Recently, we sat down with Ed Powell, SVP and Licensed Regional Manager at Angel Oak Solutions, for a conversation that went far beyond non-QM product talk. What unfolded was a candid, tactical, and deeply strategic discussion about the realities of building and scaling a modern consumer direct mortgage operation.

For mortgage leaders navigating compressed margins, volatile capital markets, AI disruption, and talent challenges, this episode offered something rare: operational clarity grounded in lived experience. What follows are the key themes that stood out most to us: not as abstract theory, but as leadership lessons from someone actively building in today’s market.

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FROM CALL CENTER TO ACQUISITION ENGINE

One of the most important reframes Ed offered was historical. Consumer direct did not start as the sophisticated channel it is today. “The legacy term that was used was call centers,” he explained. In the early days, these operations were largely inbound, reactive, and often tied to large bank brands that assumed customer loyalty would carry the deal across the finish line. Over time, that model evolved. What began as inbound telemarketing matured into outbound customer acquisition.

Ed described the shift as moving from handling existing customer inquiries to proactively sourcing new ones. That distinction matters for leadership teams. An inbound service model and an outbound acquisition engine require different analytics, different management discipline, and different cultural expectations. Today, consumer direct is not simply another distribution channel alongside retail and correspondent. It is a performance-driven acquisition platform that must be governed by data and accountability. Ed emphasized that the company owns the lead, not the LO. That stewardship mindset ensures transparency and scalability. If it did not occur in the system, it did not happen. Those guardrails may sound simple, but they are foundational when building a disciplined consumer direct operation.

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6:53 - 7:10 -- "It's been interesting in some of my group chats with my buddies. They all think that this proclamation from the President about not letting institutions buy rental homes is going to be a big deal. And I'm like, "I think they're like 2% of the business." It's almost like a nothing burger."

NON-QM PROFITABILITY: LESSONS FROM A $250 MILLION DIVISION

Angel Oak’s consumer direct division has grown over the past several years, surpassing $250 million in annual production. What stood out in our conversation was not the volume itself, but the discipline behind it. Ed was direct concerning this channel’s difficulty. Leaders considering launching consumer direct must understand that losses are inevitable early on. There is a lag between lead acquisition, payroll, and funded loans. “You’re going to lose money for six months at a minimum,” he told us.

This reality exposes one of the most common executive mistakes: measuring too early. Ed referenced the concept of evaluating a “static pool,” noting that January leads cannot truly be judged until mid-year. Early indicators such as contact rates and application volume provide directional guidance, but they do not tell the full profitability story. Scaling introduces additional complexity. Growing from four to eight loan officers may be relatively manageable. Growing from fifteen to thirty requires significantly more lead depth and capital discipline. The challenge is not always recruiting talent. Often, it is generating enough work to keep that talent productive

9:38 - 9:53 -- "There is a lot of education going on, particularly on DSCR, because I'm amazed how many people that are private real estate investors have not heard of this product before. And, you know, it's been around for a while, but some people, even real estate agents, are surprised when they're told about it."

WHERE AI ADDS VALUE - AND WHERE IT SHOULDN’T BE USED...YET

No conversation about modern mortgage operations would be complete without discussing artificial intelligence. Ed offered a grounded, practical view that cuts through the noise. At Angel Oak, AI is deployed to enhance efficiency, not replace licensed activity. AI agents validate contact information, collect basic data points, and transfer or schedule live conversations. They do not structure loans, quote pricing, or perform functions that could cross compliance boundaries. This distinction is critical. AI’s value lies in time leverage. Ed described the inefficiency of loan officers making 50 outbound calls to reach two viable prospects. By allowing AI to handle the initial outreach and validation, LOs can focus on selling rather than hunting. Transparency remains central to the approach. Consumers appreciate clarity, and those who give AI a chance are properly oriented to the process.

10:21 - 10:46 -- "We are in the customer acquisition game, but we are reactionary to our existing customer base. There are lots of guard rails and limitations on what we can and can't do with them. But if they're in the market for a new loan, we'd like to talk to them. Our loan officers, I think, do a pretty good job staying with their past customers. I would tell you right now that about 20-25% of my business is repeat customers."

NON-QM IS ABOUT SOLUTIONS, NOT COMMODITIES

One of the most compelling strategic insights from our discussion was Ed’s perspective on the non-QM market. In his words, non-QM is “less commoditized” and more solution-based. Unlike agency lending, where speed to lead and pricing parity often dominate, non-QM borrowers are frequently seeking answers after encountering obstacles elsewhere. Self employed borrowers using bank statement programs and real estate investors leveraging DSCR products often know what they need. Some have already been declined. The sales conversation becomes consultative rather than transactional. This dynamic reframes competition. Being first to the consumer matters less than being equipped to solve the problem. In some cases, arriving after another lender has said no creates an opportunity to provide clarity and structure. Ultimately, non-QM rewards expertise. It is not about racing to the lowest rate. It is about structuring viable solutions for borrowers whose financial stories fall outside conventional boxes.

Full episode

To hear more lively discussions and special guest insights in the realm of mortgages and real estate, check out TheMikedUp Show with Mike Kelleher and Michael Zau, every Thursday at 2pmET!

THE ABOVE IS A SUMMARY OF INSIGHTS & ANECDOTES TAKEN FROM AN HOUR-LONG PODCAST EPISODE OF THEMIKEDUP SHOW. MIKE & MIKE RESERVE THE RIGHT TO PARAPHRASE WHEREVER NECESSARY.