Talk Data to Me: Lending to Gig Workers, Self Employed, & Independent Contractors [Episode 31]

Talk Data to Me: Lending to Gig Workers, Self Employed, & Independent Contractors

By 2027, over 50% of the US workforce is likely to participate in the gig economy.¹ So, how will this impact mortgage lending? The gig economy and self-employed individuals pose unique challenges for mortgage underwriting due to the variable nature of their income and the need to demonstrate stability and consistency over time.

In this episode of Talk Data to Me, we delve into the world of gig economy and its impact on the mortgage lending process with Jillian Sorensen, Vice President, Account Executive at Flagstar Bank, and Heather Lundy, Contract Processor at Mortgage Pro Shop. Our expert guest sheds light on the unique challenges faced by gig workers, self-employed individuals, and independent contractors when it comes to qualifying for a mortgage. We explore the qualifications criteria, income verification, and loan programs available for these borrowers and how lenders can help support them.

Join us as we unravel the complexities and provide valuable insights for lenders looking to help gig workers secure a home loan. In this episode, we discuss:

• The gig economy's impact on mortgage lending and how it has transformed the traditional employment landscape.
• Differentiating gig work from business owners and independent contractors, including the differences in qualification criteria, who qualifies as a "self-employed" borrower, and how seasonality and second jobs can impact a borrower's ability to qualify with their gig work income.
• Demonstrating income stability for gig workers and ways to show a history of consistent income and demonstrating the likelihood of future earnings.
• When the two-year self-employment rule applies, and when it does not. While most lenders and investors require a two-year history of self-employment, we explore the exceptions to this rule.
• Interest rate implications for gig workers and the factors that the factors that lenders consider when determining interest rates for gig workers and self-employed individuals.
• Loan programs are available for self-employed borrowers; shedding light on the guidelines and options provided by FNMA, FHLMC, FHA, and VA loans.

Connect with Jillian Sorensen on LinkedIn.

Connect with Heather Lundy on LinkedIn.

About Our Guests

Jillian Sorensen

Vice President, Account Executive - Flagstar Bank

Jillian started in the Mortgage industry by chance in 1998. After buying her first home, she befriended her Loan officer who brought her into the industry. She started as an LO assistant, moved through processing, office manager and then struck an agreement to buy the mortgage company.

She met Flagstar early on and began using their warehouse line and technology. Flagstar taught her to do more with less. Flagstar’s dedication to education and training inspired her and in 2003 her Mortgage company became delegated with Flagstar. Flagstar continued to grow and innovate with new products and services and eventually helped her to become a full-service mortgage bank. She sold my company in 2005 and went to work for a large mortgage company where she gained experience managing a large staff and full delegated operation, including secondary and sales.

When the mortgage crisis happened, she relocated to Houston Texas and moved from executive management to sales. She became a full time Account Executive in 2008 and joined the Flagstar Team in 2011.

Flagstar Bank is her home and family, there’s no place she’d rather represent!  Helping her clients start and grow their mortgage businesses is her greatest honor.

Heather Lundy

Contract Processor - Mortgage Pro Shop

Heather is an experienced Mortgage Underwriting Manager with over 30 years of industry expertise. She has a strong background in DU/LPA/HELOC/JUMBO/NON-QM underwriting, making sound product recommendations while effectively managing risk. Heather excels in fostering collaborative relationships with sales teams, brokers, correspondents, retail sales, and processing departments. Her focus on maintaining high-performance standards and identifying opportunities for improvement has consistently driven success throughout her career.

Currently serving as a Contract Processor at Mortgage Pro Shop, Heather applies her extensive knowledge to ensure compliance and quality in loan processing. Prior to this, she held the position of Underwriting Manager at Flagstar Bank for 13 years, where she played a vital role in overseeing underwriting operations and maintaining regulatory compliance.

Heather's skills encompass various facets of the mortgage industry, including finance, performance management, quality control, working with brokers, and mortgage insurance. She has a deep understanding of residential mortgages, underwriting strategies, and effective communication. Heather's dedication to customer service and her extensive knowledge base make her a valuable asset in any underwriting team.

Throughout her career, Heather has consistently pursued professional growth and obtained certifications such as the Certified Residential Underwriter III from the Mortgage Bankers Association (MBA). Additionally, she holds a Lean Six Sigma Green Belt certification from Genworth, showcasing her commitment to process improvement.

With her wealth of experience and strong leadership skills, Heather brings a wealth of expertise and a track record of success to every underwriting team she is a part of.

Listen to the Episode Audio (only) 

1 Gig Economy Statistics: Demographics and Trends in 2023. Team Stage. 2023. https://teamstage.io/gig-economy-statistics/#:~:text=4.-,Over%2050%25%20of%20the%20US%20workforce%20is%20likely%20to%20participate,likely%20to%20have%20joined%20it.