He Saw the Mortgage Market's Big Flaw from Inside Fannie Mae. Now His Startup Is Arming Small Banks with a Secret Weapon.

In a mortgage landscape dominated by giants and defined by stagnation, one industry veteran is betting that the key to the future lies in empowering the underdog. After a nearly 30-year career with an insider's view of the market's mechanics, Steve Thomas is calling out what he sees as a critical failure: a dramatic drop-off in product innovation that has left smaller lenders in the dust.

Thomas is no stranger to the inner workings of the housing finance system. His extensive resume includes high-level posts at mortgage behemoth Fannie Mae and a pivotal role as the senior managing director of mortgage capital markets at the Federal Home Loan Bank of Chicago. It was from this vantage point, observing the relationship between the FHLB system and its member institutions, that a crucial insight emerged.

He realized that community banks are eager to participate in the lucrative mortgage lending market but are fundamentally outgunned. They struggle to compete against the monolithic product offerings of national banks and the aggressive tactics of specialized nonbank lenders. Without the right tools, they're fighting a losing battle.

This market disconnect is the driving force behind Thomas's new venture, Futurewave Finance. Launched in 2023, the correspondent lender is built on a simple yet powerful premise: give community banks the "secret weapon" they need to thrive. That weapon comes in the form of non-agency, or non-qualified mortgage (non-QM), loans.

These are not the standard, cookie-cutter loans that fit neatly into government-backed boxes. Instead, non-QM products are designed for creditworthy borrowers who may not meet traditional documentation standards, such as self-employed individuals or real estate investors. By providing a pipeline for these specialized products, Futurewave allows its bank partners to serve a wider, often overlooked, segment of the market.

For Thomas, this isn't just a business opportunity; it's a necessary correction for an industry that has grown complacent. He argues that the broader mortgage sector has forgotten how to innovate, defaulting to the safest and most standardized options. By focusing on the non-agency space, Futurewave Finance aims to not only equip community banks for success but also to reignite the spirit of product development that is essential for a healthy and competitive housing market.