The bank, which saw Moody’s Investors Service lower its credit grade to junk status, suffered a drop of 70% in its stock price before recovering toward the end of the week. The recent troubles for NYCB began when the bank announced on Jan. 31 that it suffered a surprise loss of $252 million in the fourth quarter of 2023. The bank had notched a $172 million profit for the same period in 2022. It also reported $552 million in losses from bad commercial real estate loans. The hobbled bank slashed its quarterly dividend from $.17 per share to $.05 per share.

This might be just the beginning of tough times for NYCB, however. The bank’s poor performance was being blamed on the acquisition last year of $40 billion of assets from Signature Bank, which was among the three banks that failed early last year. Those failures set off alarm bells that the banking sector was in danger due to an increasing number of commercial real estate defaults.

NYCB is in the process of merging with Flagstar Bancorp, Inc., which operates 420 branches throughout the country, with an emphasis on the Northeast and Midwest. The acquisition of Signature Bank and merger with Flagstar makes the combined company one of the largest regional banks in the country, with more than $100 billion in assets. NYCB plans to start operating under the Flagstar name later this month.

There are worries that the troubles facing NYCB could spread to other top regional banks also holding loans for commercial real estate, including office buildings and retail properties, which could sour in the coming months and potentially create a repeat of last spring’s bank crisis.

The post Commercial real estate loans put pressure on another regional bank appeared first on Scotsman Guide.

Gurtler recently told Scotsman Guide that her wild growth was due to a lot of hard work and sacrifice. Her first two years, she had to hit the gas and learn as much as she could without falling behind. It was difficult, but she thrived in the high-pressure environment.

Now she’s hit her stride and is intimately familiar with the loan process in New York — which she calls “very long and unique” — as well as the other states she originates in. She studies constantly, keeping up with Fannie Mae and Freddie Mac rules along with special guidelines for self-employed borrowers. And Gurtler is organized and proactive, with spreadsheets full of borrowers who locked in at higher rates and a calendar packed with reminders to follow up.

She spends her working hours in Manhattan’s Financial District, in an office she calls “inspiring” because of co-workers who are team players (even if they’re technically competing for loans). After hours, you can find her at a comedy show in the city or at home cuddling her dog, Jax.

As a loan consultant for Ally, which partners with Better Mortgage Corp. on its digital platform, Gurtler has one of the largest marketing forces in the industry behind her. She also has a built-in client base in Ally’s banking and auto loan customers. While business slowed a bit in 2023, she still faces a unique problem in the current market: a full pipeline and more loans than she can close by herself.

“There is a lot of volume, so being able to get to everyone can be a challenge,” Gurtler said. “That requires a lot of hard work, a lot of dedication, to sit down and make those phone calls, answer those emails and be available as much as I can.”

She said she had to learn to be a leader and delegate when she needs assistance. She mentions her team often and affectionately, attributing much of her success to their support. Gurtler’s team of loan officer assistants keep in touch with borrowers early in the home purchase process and provide round-the-clock customer service.

This frees her up to focus on more immediate matters like borrowers with accepted offers, closing dates within 90 days and refinance applications. The market slowdown has allowed her more time to interface with each client and to chat with people who are still shopping. She’s earned one of the top accolades among Ally originators for spending so much time on the phone.

“I’m enjoying (the job) more because I feel like I’m giving that personal attention to my clients,” Gurtler said. “I’m building better connections, and I feel happier when they get their offer accepted or they get out of a high adjustable rate, because I know them more personally.”

The slowdown has also offered her a chance to regroup and “get off the hamster wheel.” Her company, she said, is focused on launching new services, including fully underwritten preapproval letters and a 24-hour turnaround on commitment letters.

“Having that in our back pocket is all the rage,” Gurtler said. “The Realtors love hearing that.”

She also has more time to travel and pursue her favorite hobby, snowboarding. Gurtler has made a point to travel to cities that are seeing a lot of in-migration, like Charlotte. When she talks to borrowers buying homes in these cities, it’s easier to build rapport because she understands the area and its way of life.

“I might be the only loan officer that feels this way, but I enjoyed 2023. Maybe not volume-wise, but I’m not in this industry to just make money,” Gurtler said.

Her biggest reward comes from helping people, especially first-time buyers, get into their dream homes. “My favorite thing in the world is when we go over their monthly payment and they tell me that it’s cheaper than rent. Best feeling,” she said. ●

Tips of the Trade

Work with your team if you’re lucky enough to have one. It’s impossible to do everything on your own. You need to work well with others and delegate. Those qualities can really help you reach more clients. Remember how important this is for the client — they’re buying a house or saving money on a refi. This is a big deal, so don’t lose sight of how you’re helping others. Make sure you follow up as much as possible. Stay on top of the borrower so they feel important, because they are.

The post Featured Top Originator: Marissa Gurtler, Ally powered by Better appeared first on Scotsman Guide.

The overall index was benchmarked to a reading of 100 in March 2012. Declines in the MCAI signify that lenders are tightening their credit criteria, and December’s 4.6% drop sent the index to its lowest reading since the first year of the series.

December marks the second straight month with a drop in mortgage credit availability after a transitory three-month period of increases.

Joel Kan, MBA vice president and deputy chief economist, said that “ongoing industry consolidation is resulting in more loan programs being removed from the marketplace.” Many lenders have reduced their payrolls to cope with fewer originations, resulting in more limited loan offerings.

All component sub-indices of the MCAI posted declines in December. The Conventional MCAI decreased 3.2%, while the Government MCAI backtracked by 5.9%. The two sub-indices of the Conventional MCAI took steps back as well, with the Jumbo MCAI receding 1.7% and the Conforming MCAI falling 5.9%.

In the case of the Government sub-index, Kan observed that the decrease was “driven by lower investor demand for renovation loans and streamline refinance loans.”

The post Mortgage credit availability decreases in December appeared first on Scotsman Guide.

Every journey has a story. Imagine a new broker who is learning about SBA loans from his high-performing colleagues. The broker quickly realizes that the leaders in this space have carved out loan niches for themselves. Some specialize in specific industries while others focus on distinct loan purposes.

“A well-prepared borrower who has all documentation in order and a clear understanding of the steps involved can significantly streamline the process.”

Inspired by these observations, the broker decides to concentrate his efforts toward funding SBA loans in specific sectors such as hospitality and gas stations. He quickly sees the number of loans he’s completing skyrocket. The lesson is clear: Amid the variety of SBA loans, finding and mastering a niche can set a trajectory for success.

Over the years, the SBA has undergone significant transformations as the agency has adapted to the ever-changing needs of businesses and the broader economy. For brokers just learning about it, the government agency doesn’t offer direct loans. Instead, the SBA helps small businesses secure capital by guaranteeing repayment, sometimes for as much as 85% or 90% of the amount borrowed, from a bank or other lending institution.

Know the details

The SBA offers a variety of loan programs, each designed to support different business needs. The 7(a) loan program is the agency’s most common offering, with loans of up to $5 million for a range of business purposes, including working capital, expansion or equipment purchases.

The 504 loan program, available through a certified development company (CDC), is also popular, with financing tailored for major fixed-asset purchases such as real estate or large equipment. It offers long-term, fixed-rate financing of up to $5.5 million. At the other end of the spectrum, the SBA’s microloan program supports smaller businesses with loans of up to $50,000. These loans average $13,000 in size and are ideal for startups or other small companies in need of a modest capital boost.

The SBA has worked to streamline the lending process and shorten the wait times for borrowers. But myths abound. One such misconception is the time-intensive nature of an SBA loan. With the right partnerships, originating these loans can be as efficient as other traditional financing mechanisms.

“Brokers who are persistent, willing to delve deep, question the status quo and relentlessly pursue the best for their clients are the ones who truly stand out.”

The SBA process employs a tiered structure, with timelines that fluctuate based on the loan’s size, purpose and specific program being utilized. There are many nuances to the deal that can make the process speed up or slow down. For 7(a) loans, the time frame can vary significantly. Simple cases can require as little as 20 days, while complex transactions involving construction could extend beyond 90 days.

The 7(a) process encompasses three primary phases: packaging, underwriting and closing. Packaging speeds hinge on the borrower’s responsiveness and can take as little as 48 hours if documentation is promptly provided, although it usually lasts one to two weeks. Underwriting is contingent upon the deal’s complexity and takes one to two weeks on average. The closing phase can take approximately three to six weeks, although it’s not uncommon for this period to be extended due to additional third-party reports that are necessary for more intricate deals.

Throughout these stages, the borrower and broker must gather comprehensive financial data, not only for the business in question but also for any personal guarantors or associated businesses in which the borrower has a majority ownership stake. This thorough vetting process ensures a robust and transparent financial overview, which is critical for successful loan approval.

Dual-track process

The SBA 504 loan program is a dual-track process that demands synchronized efforts between a conventional lender and a certified development company (CDC). The CDC serves as the local delivery partner for the SBA loan.

As the borrower navigates through the application, the bank initiates its underwriting procedures in tandem with the CDC, which is responsible for securing SBA approval for their subordinate lien position or second trust deed. This coordination is crucial since the 504 loan is designed for the acquisition or refinancing of real estate or other significant fixed assets, thereby necessitating a layered approach to due diligence.

During this time, critical assessments such as property appraisals and environmental reports are conducted to ensure compliance with federal guidelines and to evaluate any potential risks. In addition, the process includes securing proper title documentation and insurance coverage. These steps are integral to safeguarding the interests of all parties involved in the transaction.

Typically, the entire 504 lending process from application to disbursement spans a period of 60 to 90 days. But it’s essential for mortgage brokers to communicate to clients that this timeline can be affected by the complexity of the deal and the promptness of submitting the required documentation. As such, a well-prepared borrower who has all documentation in order and a clear understanding of the steps involved can significantly streamline the process.

Watch for challenges

SBA loans are not without their challenges. For brokers wanting to originate them, it’s imperative that they go beyond a surface-level understanding and truly immerse themselves in the intricate processes that define this space. They must be responsive, organized and tenacious.

Clients are often navigating unfamiliar terrain when seeking SBA loans. Their anxieties, questions and concerns are valid. Brokers need to be responsive to their needs and ensure open channels of timely communication. In moments of uncertainty, a prompt reply or a reassuring update can make a world of difference.

The SBA loan process can be likened to piecing together a jigsaw puzzle. Each piece, whether it’s a financial document, a business plan or a property appraisal, holds significance. Brokers need to take a methodical and organized approach to ensure that no detail is overlooked. It’s all about maintaining thorough documentation, streamlined workflows and structured client interactions.

Central to a broker’s success is a systematic approach to loan origination. It starts with an in-depth understanding of the borrower’s needs. This foundation then paves the way for collecting the relevant documents and ensuring they align with the loan program’s prerequisites. But it doesn’t stop there. It’s also important to provide a thorough cash-flow analysis to evaluate the financial health of the business and discern its viability.

The SBA loan process can be complex, and brokers will find that tenacity comes in handy. Regulations evolve, client needs vary and economic climates shift. It’s a domain that demands a broker to be both knowledgeable and resilient. Brokers who are persistent, willing to delve deep, question the status quo and relentlessly pursue the best for their clients are the ones who truly stand out.

Lasting partnerships

As commercial mortgage brokers become successful, it’s easy to become focused on the allure of rate shopping. The prospects of landing the most competitive rates and the highest referral fees are enticing for any firm.

Possibly more important for long-term success, however, is relationship building. By forging lasting partnerships with lenders, brokers will find that such connections are the true cornerstones of success.

The SBA loan journey is often filled with intricate processes, meticulous documentation and constant communication. In such a scenario, the quality of the relationship with the bank can significantly influence the overall experience for both the broker and the borrower. It’s about finding lenders that offer not only competitive rates but also a collaborative spirit, a willingness to guide and a commitment to transparency.

Brokers should seek out banks that resonate with their working styles, values and goals. This alignment is about more than just transactional interactions. It’s about shared vision and mutual respect. This can lead to a smoother and quicker process. By nurturing this relationship through regular check-ins and ensuring open channels of communication, the resulting ties may lead to faster response times as well as exclusive access to special offerings.

These relationships also create a ripple effect that enhances the experience for a client, expedites their loan process, and often leads to better terms and conditions. Having a solid relationship with a bank can boost a client’s confidence in the broker’s abilities.

● ● ●

In the realm of SBA lending, it’s easy to get lost in the numbers and the allure of quick wins. But it’s relationships that make the real difference. These deep-rooted connections with banks aren’t just about smooth transactions; they are the backbone of your success. Every broker can crunch numbers, but the real leaders in this space dive headfirst into the world of relationship building.

This isn’t just about sealing a deal. It’s about forging partnerships that last. To those standing at the edge of the water, don’t just dip your toes in. Dive deep, embrace the challenges and remember that with genuine relationships and a clear focus, successful SBA lending is not merely achievable but also inevitable. ●

The post Navigating the SBA Loan Landscape appeared first on Scotsman Guide.

Goss said she wanted a strong pedigree to be a professional mortgage banker. She served in the U.S. Marine Corps for five years, earning a degree in finance during her service, and then went to grad school at Boston University. She had to leave the Marines due to an injury but spoke highly of her experience, calling it one of her “greatest accomplishments.” In fact, Goss was only a few hours away from attending a Marine Corps ball when she recently spoke to Scotsman Guide.

She started her career at Navy Federal Credit Union as a member service representative and transitioned into mortgages after managing a bank branch at BB&T. There, she attended the “retail academy,” which taught her from the ground up how to do all kinds of loans, from conventional to home equity and business loans.

“I was able to break into cold calling people and learned to build relationships. Making calls and having day-to-day banking experience before I got into actual mortgage banking gave me a lot of context,” Goss said. “Being in the finance world made my foundation when I came into mortgage funding really, really strong. … I feel empowered to be able to help (my clients) because of that knowledge.”

Ten years into her career, Goss specializes in U.S. Department of Veterans Affairs (VA) lending. There’s a lot that people don’t understand about VA loans, Goss said, so she aims to be a source of education — the first one people call when they have questions. She’s visible in her community of Jacksonville, North Carolina, and she’s a familiar face at nearby Camp Lejeune, where she runs classes and seminars for service members.

All of this is great for business, and military relationships are at the core of her business. Goss further expands her influence by serving on the military affairs committee of her local chamber of commerce, stays involved with organizations like Hope for the Warriors and the Veterans of Foreign Wars, and is active in online groups for military women.

She’s worked hard to build relationships and is never afraid to “get her hands dirty” by doing the heavy lifting, but she credits a lot of her success to her team. “There’s no scenario that we really haven’t seen, collectively,” Goss said. “I feel like that makes us more powerful.”

Despite some challenges — including a difficult 2023 full of ups and downs for her business — Goss is grateful and loves the career she’s worked so hard to build. “I got to watch my mom do it, and she made a difference in so many people’s lives, so I just love making that difference and I feel like I do it for the right reasons,” she said. ●

Tips of the Trade

I tell people all the time in this industry — because everybody wants to be a loan officer — if you’re doing this for the money, you’re doing it for the wrong reasons, because you will eventually fail. And if you’re looking for something balanced, then you need to pick another career. This is very high stress and you take work with you everywhere you go, even on vacation. You have to be ready to work and you have to have thick skin.

The post Featured Top Originator: Amy Goss, Guild Mortgage Co. appeared first on Scotsman Guide.

“I loved Greece — I really did — and I didn’t see myself ever leaving. … The plan was go, start a career and transition back to Greece. But life has different plans sometimes,” Petritsis said. “This is where I met my wife and we made a home here.”

The couple had three daughters and settled down, but Petritsis and his wife Georgia are keeping their dream alive. They plan to return to Greece for half of each year when they retire.

Life also had plans to move him again, from Albuquerque to Houston, where Wells Fargo offered him a position as an area manager in 2010. He settled there with his family and worked in a nonproducing role for a few years, which gave him time to expand his Rolodex of referral partners and develop a system for building deep relationships with them.

Now he’s back to producing loans at Prosperity Bank, where he’s worked since 2018. He still uses the same building blocks to create mutually beneficial partnerships with Realtors and homebuilders. Making Realtors happy, he said, comes down to three simple things: no surprises, expedited service and a consistent loan process.

Builder relationships are especially important to Petritsis too, since one of the bank’s most popular products is its one-time-close construction loan. He’s eagerly pursued hundreds of these relationships.

“In the one-time-close space, you need to have a relationship with the builder. That was the main focus: ‘How do we become friends with the local builders?’” Petritsis said, adding that he and his team aggressively pursued builders, charmed them with sharp underwriting skills, delivered on promises and executed smoothly.

The construction product — along with other useful tools offered by Prosperity such as home equity lines of credit, lot loans and options for non-U.S. residents — even nets referrals for Petritsis from other mortgage originators. Among his friends and connections in the industry, the products he offers are well known, so when another lender doesn’t have what Petritsis has, the client is often referred to him.

Business has slowed this year in the Houston area, he said, but it hasn’t been as dramatic as some other markets. Houston is a “relocation sweet spot,” Petritsis said, and people are still moving there. He invests time in every client, having a long conversation with them at the beginning of the mortgage process. The 30 to 45 minutes he spends getting to know each client helps him to understand exactly what they need and works to prevent any possible hiccups down the road.

“I really believe that when you communicate with a customer that it’s not about rate, it’s not about terms, it’s about helping them understand the process — a predictable process, I would say, with no surprises,” he said. “That’s what customers are ultimately looking for, to do business with somebody that understands their wants and needs, and gets them to the finish line.” ●

Tips of the Trade

Learn the business. What I mean by that is, be the processor, be the underwriter, know how to analyze income. Know every aspect of the business, and that will really help you better level with the customers and with your internal partners. What I recommend to everybody is to make friends in the industry. Don’t build a transactional relationship; make long-lasting relationships in the marketplace. Your Realtors or builders, everybody’s going through the same obstacles, so it’s OK to be human. Go deep on your relationships.

The post Featured Top Originator: Spiro Petritsis, Prosperity Bank appeared first on Scotsman Guide.

“We’ve been in such a super low-rate environment and to get to this point this quickly is what’s so painful for the industry.”

What could ease this tension is a decline in interest rates, said Marty Green, principal with Polunsky Beitel Green LLP, a law firm that provides legal support to residential mortgage lenders. Once rates drop, the dam could finally break open.

“We’d see some sellers get back in the market and that might improve our inventory a lot, which would be a good thing for the market,” Green said.

Green, in his role representing mortgage lenders, is a close observer of the Federal Reserve. He spoke to Scotsman Guide about when he thinks interest rates could drop, whether there will be a recession and what could happen that would roil the financial picture.

Do you think interest rates will continue to rise?

They’re going to continue to bounce. That’s how I would describe it. The general trend line is going to be pretty flat. We’ll see a few times where they’ll bounce up very uncomfortably. We’ll see some opportunities where they’ll bounce downward until we finally get into a downward trend at a more steady pace, probably in mid-2024.

Why would it happen then?

One, inflation will be much more in the rearview mirror, which may give the Fed latitude to moderate their position with respect to rates and maybe even drop it a little bit. The other thing that will happen is that once everyone becomes much more comfortable that inflation is in the rearview mirror and we’re not going to see additional increases, the premium that we currently see between mortgage rates and Treasurys will melt away.

Is the angst in the mortgage industry and among potential homebuyers about elevated rates justified?

It is. It’s changed the behavior of buyers and sellers along the way. To some extent, the rate itself is not the problem. It’s where you’ve been. That’s the issue. We’ve been in such a super low-rate environment and to get to this point this quickly is what’s so painful for the industry. What it has done is sort of frozen a lot of homebuyers and home sellers.

What have the rate increases done to the housing and mortgage markets?

Sellers may be ready to downsize or ready to do something else, but when they look at the delta between what they are paying now and what they will pay on a new mortgage, it just creates a paralysis situation where the timing just doesn’t seem right. On the mortgage side, the higher rates have really stressed margins so that mortgage companies are not making much money at all.

Does it seem like the housing and mortgage industries are ‘taking it for the team’ for the benefit of the entire economy?

No question. We may have benefited unduly during the pandemic and the boom that we saw there in terms of the increase of activity. We’re certainly paying for it now.

Has the Fed’s attempt to rein in inflation been effective?

Largely it has. If you look at the inflation rate today versus what it was six months or a year ago, we’re in much better shape now than we were then. Is raising rates the perfect tool for (taming inflation)? Perhaps not, but it’s had the intended effect of slowing down the economy and bringing inflation down significantly.

Do you think there will be a recession or a soft landing?

It’s either going to be a very, very mild recession or a soft landing. Certainly, different industries have felt the brunt of it differently. Housing is one that has been in recession and probably will be for the next several months.

What can change this financial picture?

Some of the geopolitical things have helped moderate some of the increases, frankly, with the flight to safety. There are things that could happen outside of the Fed that could influence the mortgage market. What’s happening with Israel actually could help moderate rate increases, but there’s some speculation that if it causes an oil spike with unrest over there, as well as what’s going on in Russia, that could actually feed inflation, meaning interest rates stay higher for longer. ●

The post Q&A: Marty Green, Polunsky Beitel Green LLP appeared first on Scotsman Guide.

That’s according to the Quarterly Mortgage Bankers Performance Report released by the Mortgage Bankers Association (MBA), which found that net production income has been in the red for six consecutive quarters.

“A decline in origination volume worsened net production losses in the third quarter of 2023,” said Marina Walsh, the MBA’s vice president of industry analysis. “While production revenues stayed relatively flat, per-loan production costs reverted to the third-highest level in the history of MBA’s survey, which reversed a portion of the cost improvements made in the second quarter.”

The net loss per loan in Q3 was a stark increase from the reported per-loan loss of $534 one quarter prior. Average production volume dipped to $477 million per company in the third quarter, down from $502 million per company in the second quarter. By loan count, IMBs averaged 1,497 loans in the third quarter, down from 1,553 loans in the previous three-month period.

Total production revenues, as Walsh noted, saw minimal change, growing slightly from 328 basis points in the second quarter to 329 bps in the third. On a per-loan basis, production revenues fell to $10,426 per loan in the third quarter, down from $10,510 in the second quarter.

But costs have ballooned. Total loan production expenses, including commissions, compensation, equipment, occupancy and other costs, grew to $11,441 per loan, up nearly $400 quarter over quarter. Consider that from Q3 2008 through Q3 2023, loan production expenses have averaged $7,305 per loan.

With sales volumes remaining subdued, it’s likely that the ongoing streak of losses hasn’t yet reached its end, according to Walsh.

“MBA forecasts lower industry volume over the next two quarters compared to last quarter, which means a turnaround is unlikely until the second quarter of 2024,” she said.

“One silver lining is that mortgage servicing continues to be a bright spot for many companies,” Walsh noted. “Combining both the production and servicing business lines, roughly half of mortgage companies stayed profitable in the third quarter of 2023.”

Fifty-one percent of the firms in the MBA report logged pretax net financial profits during the third quarter, down from 58% in the second quarter.

“Were it not for mortgage servicing, only about one in three companies would have been profitable,” Walsh said.

The post IMBs post $1,015 loss on each loan originated in third quarter appeared first on Scotsman Guide.

“Those clients that we really achieved something with … those are the ones that really make our job worthwhile.”

He loves educating clients, strategizing with them on a path to their goals and eventually seeing them reach their dream of homeownership. “I think (my favorite part) is really just working with clients, and that satisfaction you get out of educating someone and getting them to the point of being able to own their own home when they never thought it possible,” Marquis said.

Much of his business is in conventional and jumbo loans, given the high home prices in his local market. But he said his client base is wide — from first-time buyers trying to avoid high rents to investors seeking to snap up new properties. He sees a lot of clients in biotechnology, a huge industry in Boston, and does U.S. Department of Veterans Affairs (VA) loans regularly as well.

Because of his focus on education, Marquis and his team are deeply knowledgeable about guidelines and are more strict upfront so there are no surprise denials later. “We get a lot of business from other lenders, where they fail to structure the loan correctly from the get-go,” he said. “So, for example, they don’t poke holes in the loan the right way and figure out what could go wrong with it. … (They) are unable to close, the customer will come to us and we can help.”

Over the thousands of loans he’s closed in his career, Marquis said that the transactions that stick out the most are the ones where he has helped the client out of a tough spot in their life. “It could be a situation of a client that’s getting divorced and has to refinance to keep their home, or it could be a client that we had to work with on their credit, or they had to save for a downpayment,” Marquis said. “Those clients that we really achieved something with — that they did not think they could achieve, or we got them out of a really challenging spot — those are the ones that really make our job worthwhile.”

Marquis and his team also donate $25 from every transaction to the Friends of Boston’s Homeless housing startup fund. In three years, the team has donated more than $100,000 to the fund, which helps Bostonians experiencing homelessness to overcome the financial barriers to housing and get connected to vital support services.

“You know, we’re all on the earth, we’re all going to end up in the same place at some point,” Marquis said. “And you realize you’ve got to allow others to succeed in this world in the way that we have, right? (It takes) a lot of hard work, but not everyone’s been as fortunate and had the opportunities that we’ve been fortunate to have.”

Marquis is riding out the tough market and positioning himself to capitalize on the next up cycle. His team is active on social media to connect with borrowers and Realtors, and he’s always expanding his referral network through events and one-on-ones. Since joining CrossCountry two years ago, he said he’s had support and freedom to design his own processes that work best for his team and his market.

“I think there’s opportunity in the market for the right situation, but our industry is always challenging. … This cycle is very unique,” he said. “The market’s always developing. Now we have to be forward thinking. What’s our next step? Where do we go next?” ●

Tips of the Trade

When you pursue a certain angle, you’re ultimately going to achieve that if you have a focused and dedicated approach. Figure out what direction you want to go — first-time homebuyers, FHA loans, VA loans — and then be very dedicated to that. If you want to go after purchase business, you have to build that one by one. Realtors want a financing solution that’s going to work. Work as a partner who can help them do more business. Work with up-and-coming agents and build business with them. It doesn’t happen overnight, but if you know your guidelines, you do right by your referral partner and your borrower, you provide excellent communication and you follow up, you can really build a great business in this industry.

The post Featured Top Originator: Andrew Marquis, CrossCountry Mortgage appeared first on Scotsman Guide.

“There’s some tweaking that could be done in terms of the mortgage rates, because we think they’re out of whack.”

CHLA advocates on behalf of the smaller and midsized IMBs, the lenders doing somewhere in the range of hundreds of millions of dollars to tens of billions of dollars in loans per year. These lenders have endured what has turned out to be a difficult year in the mortgage market, said Scott Olson, CHLA’s executive director.

“I think optimism reigns supreme, and it is struggle, but I think we’re looking forward to a better year in 2024,” Olson said.

Olson talked about the challenges his member institutions face and what could brighten the skies. He also talked about last year’s merger between the Community Mortgage Lenders of America (CMLA) and the Community Home Lenders Association, which created the current organization.

How are smaller and midsized community mortgage lenders weathering the current market?

Obviously, the volume has gone down significantly in the last year and a half because the rates have more than doubled. The overall trend is IMBs, over the last 16 months, have had to make job cuts to rightsize and reconfigure their companies. A few have gone out of business, some have merged, but I think our firms are weathering the storm.

What are the other biggest issues facing smaller lenders?

For those that originate Fannie Mae and Freddie Mac loans, we’ve seen concerns on our members’ part about the level of repurchase demands on loans that are performing. Older loans have lower coupon rates. So, if you’re forced to repurchase a loan, you’re not only assuming the risk, but you have a huge loss.

That’s when Fannie and Freddie find something wrong with the loan and make it go back on the lender’s books, right?

We’ve been really clear, if the loan is defective, that’s fine. That’s different. A lot of times we see these are differences in appraisals. It’s not a clear-cut error. It’s the difference of opinion. So, we just think that they’ve been a little bit on the aggressive side.

What’s being done about that?

We’ve been really pleased that the (Federal Housing Finance Agency) director and, to some extent, the (government-sponsored enterprises), have been responsive. We’ve been saying, ‘Look, whatever you feel that the risk is, do this as an indemnification.’ We’ll pay a relatively small fee, which we think represents the risk of what is still a performing loan.

Large banks are shying away from loans on low-cost homes. Are smaller lenders the answer?

The FHA has been trying to look at ways that we can incentivize smaller loans. It’s just harder. Some of the fixed costs of doing loans are going to be the same whether it’s a $90,000 home or a $650,000 loan. I think you’re right: IMBs and particularly smaller community IMBs are really interested in doing this. With volume declining, people are looking for business.

Any bright spots on the horizon?

We’d love to look forward to rates going down. Our members believe that interest rates are about 100 basis points, a full percentage point, over where they should be historically versus comparable bond yields. The Fed’s going to deal with monetary policy overall to control inflation. That’s a good thing. But there’s some tweaking that could be done in terms of the mortgage rates, because we think they’re out of whack. If rates came down, some of the clouds would lift.

What are the lessons that have been learned with last year’s CHLA-CMLA merger?

We probably regret we didn’t do it four years earlier. We’re really a bottom-up organization in the sense that members set the tone. I think we have more clout. The cultures have mixed well. We were pretty similar organizations to begin with.

We just had so many things in the last year that were big priorities that we’ve gotten across the finish line. Cutting FHA premiums, that was big for us. We weighed in to protect smaller members in the promulgation of capital requirements for Ginnie Mae and FHFA. I think we’ve kind of had a banner year. ●

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