VA Loans Archives - Scotsman Guide

Featured Top Originator: Patton Gade, LoanDepot

Hannah Darden — Sat, 01 Jul 2023 17:33:00 +0000

Scotsman Guide’s Featured Top Originator for July 2023 is Patton Gade of LoanDepot. He discusses the details of his specialty: U.S. Department of Veterans Affairs loans.

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2023 Top Veteran Originators

Hannah Darden — Sat, 01 Jul 2023 17:14:00 +0000

Each year around Independence Day, Scotsman Guide highlights the contributions of military veterans in the mortgage industry. This year, our Top Veteran Originators closed $4.7 billion in loan volume and secured financing for nearly 13,000 homes in their communities across the nation.

While the overall volume of the Top Veteran Originators in the 2022 production year fell from the sky-high totals of the two previous years, it rose from the 2019 production year and continued an overall upward trend. The winning individual volume also increased from 2019, with the No. 1 Top Veteran Originator — Jason Smith of Nova Home Loans, a Navy vet — doing $175.5 million in business.

Second on the list is Army vet Patton Gade of LoanDepot, who originated $165.4 million. Named after the legendary Gen. George Patton, Gade specializes in U.S. Department of Veterans Affairs (VA) loans and also took the top spot among the publication’s Top VA Volume originators. Read more about him in this month’s Featured Top Originator.

Third on the Top Veteran Originators list is Ray Shanahan of TowneBank Mortgage, an Army veteran who closed $159.7 million in loans in 2022. Rounding out the top five are Navy vet Martin Medve of Trident Home Loans LLC ($147.6 million) and Air Force vet Joseph Smith of CrossCountry Mortgage ($119.3 million).

Also highlighted this month are the Top VA Volume rankings. These originators specialize in loans for active-duty military members, reserves and veterans, and you’ll see a lot of overlap with the Top Veteran Originators list. As members of the military community, many of these originators speak the language of VA loans and excel in this arena.

At the front of the Top VA Volume list, as mentioned, is Patton Gade of LoanDepot, who originated $135.8 million across 255 VA loans. Reginald Maddox of Fairway Independent Mortgage Corp. came in second, originating 236 VA loans for an aggregate volume of $133.2 million. Jennifer Beeston of Guaranteed Rate was third, originating $117.3 million across 286 VA loans. Rounding out the top five are Martin Medve of Trident Home Loans LLC with $117.1 million and Scott Evans of CrossCountry Mortgage with $115.3 million.

Scotsman Guide thanks all of the Top Veteran Originators for their service, as well as the Top VA Volume professionals for helping the nation’s military members and veterans to secure their dream homes. Happy Independence Day to all of our readers — soak up some sun and enjoy the barbecues and fireworks.

Rankings verification: Hannah Darden, Brian Warr

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Total loan volume drops but exceeds pre-pandemic figure

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The aggregate volume of the 75 people listed in this year’s Top Veteran Originators rankings fell significantly from last year but is still trending upward overall compared to the year prior to the COVID-19 pandemic. This year’s aggregate volume was $4.7 billion, down from last year’s total of $7.7 billion, while still representing an increase from the $4.1 billion total in the 2020 rankings (based on the 2019 production year).

Additionally, the average loan size for this year’s top 75 originators — the aggregate loan volume divided by the total number of loans closed — fell by only $2,000 from the 2022 rankings. The average loan size of $363,297 represents a huge increase from the 2019 production year, which saw an average loan size of $285,135. And the total loan volume of the top-ranked veteran loan officer also rose during this time, jumping from $101.9 million in the 2020 rankings to $175.5 million this year.

Home prices, interest rates of concern for VA borrowers

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More than 70% of current military service members plan to buy a home in the next five years, according to a recent survey from Veterans United Home Loans. About 30% of all respondents said they’re planning to buy this year, including 15% of veterans.

Among the service members and veterans surveyed, high home prices had the biggest impact on the decision to buy a home. About 56% of respondents believe that it will be somewhat difficult or very difficult to buy a home in the next year. Veterans also noted rising mortgage rates as a concern for their homebuying plans.

Almost 70% of active-duty military reportedly rent a home or live in base housing. Only 29% own their homes, compared to 58% of veterans and 61% of National Guard and Reserve members. Awareness of the U.S. Department of Veterans Affairs (VA) loan program was highest among active-duty personnel, while most respondents said that the zero-downpayment option was the biggest benefit.

Notably, the proximity of a service member to a military base influenced their awareness of the VA loan benefit. Those who lived less than 30 minutes from a base were much more aware than those who lived at least three hours away. According to the survey, this means National Guard and Reserve members may be less aware of their benefit.

Steady rise of women in military continues

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The total number of U.S. military and civilian personnel remained relatively flat from 2020 to 2021, with the share of women in the military ticking upward slightly, according to a demographics report from the Department of Defense. Inclusive of all active-duty, National Guard, Reserve and civilian personnel, about 3.5 million Americans work in military jobs.

In 2021, the last year of available data, women represented 17.3% of the active-duty force, up 10 basis points from 2020. Among the National Guard and Reserves, women made up 21.4%, an increase of 30 basis points from 2020. Between 2017 and 2021, female representation rose 1.1 percentage points in the active-duty force and 1.8 points in the Guard and Reserves.

The report found that 31.1% of active-duty members were racial minorities, with 17.2% identifying as Black or African American. Another 17.7% of active-duty members identified as Hispanic or Latino.

The average age for an active-duty member was 28, with more than 44% under the age of 26. Among officers, the average age was 34 years, with the 26- to 30-year-old age group and the 41-and-over group each representing the largest brackets by age at 23.1%.

Coastal areas saw most expensive VA loans

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Coastal and island states, along with U.S. territories, had the largest average VA purchase loan sizes in fiscal year 2022 (the 12-month period ending this past September), according to data from the U.S. Department of Veterans Affairs. Unsurprisingly, Hawaii topped the list with an average VA purchase loan amount of $741,962.

Washington, D.C., followed closely behind at an average of $726,625. In third place was California, with an average purchase loan amount of $600,334, while the U.S. Virgin Islands and Washington state rounded out the top five with average loan sizes of more than $500,000. While thousands of VA purchase loans were done in Hawaii — and tens of thousands in California and Washington — it’s worth noting that only 467 purchase loans were completed in Washington, D.C., with just 40 in the U.S. Virgin Islands.

The states with the most VA purchase loans were Texas, Florida and Virginia. This suggests that while the typical loan amounts aren’t as high in these locations — ranging from $358,000 in Florida to $429,000 in Virginia — there’s more business to be done there.

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CFPB permanently bans lender for deceiving military families

Arnie Aurellano — Mon, 27 Feb 2023 23:27:59 +0000

The Consumer Financial Protection Bureau (CFPB) gave RMK Financial Corp. the death sentence on Monday, permanently banning the company from engaging in mortgage lending activities or from making money in the industry.

In 2015, the CFPB issued an agency order against Ontario, California-based RMK, which did business as Majestic Home Loans, for a number of offenses. Chief among these was the distribution of advertisements to military families that bore fake seals from the U.S. Department of Veterans Affairs (VA), fake logos from the Federal Housing Administration (FHA), and other deceptive language and symbols. Such insignia and verbiage falsely implied that RMK was affiliated with the U.S. government or that the notices were sent by the VA or FHA, the CFPB stated.

While RMK was licensed in at least 30 states and originated VA-guaranteed loans, it was not officially affiliated with the VA or FHA. Other violations within RMK’s advertising included misleading use of the names of homeowners’ current lenders; deceptive practices regarding interest rates and unavailable credit terms; and misrepresentation of loan requirements, monthly payment amounts and projected savings from refinancing. The company was ordered to end the false advertising practices and to pay a fine.

Despite the rebuke, however, RMK continued to disseminate “millions” of such ads, according to a statement from the CFPB. Officially, the CFPB found that RMK’s actions are in violation of its previous 2015 order, as well as the Consumer Financial Protection Act, the Mortgages Acts and Practices Advertising Rule, and the Truth in Lending Act.

“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good.”

In addition to the ban, RMK has been penalized $1 million, which will be deposited into the CFPB’s victims relief fund.

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Jennifer Beeston, Guaranteed Rate

Hannah Darden — Wed, 01 Feb 2023 10:00:00 +0000

Jennifer Beeston’s first encounter with the mortgage industry was a terrible one. In the mid-2000s, Beeston and her husband bought their first home with little knowledge of mortgages and without knowing what questions to ask. Their lender never went over payments, debt-to-income ratios or closing costs. The couple were simply told they could buy a home, so they did.

“We were so excited to be in our dream house … and then we got the bill,” Beeston said. “I still remember it to this day. I had my son on my hip and I almost dropped him when I opened it. We were officially house poor.”

I will retire when VA buyers are known as the most aggressive shoppers and the VA market is similar to conventional, with lower rate disparity. That is my mission.

Beeston said that stressful experience became the framework for her entire career. A year after getting that loan, Beeston began working as an office manager at a mortgage company and quickly transitioned into sales. Fifteen years later, she originates in 48 states, with a focus on U.S. Department of Veterans Affairs (VA) loans and first-time homebuyers, groups that are more vulnerable to being taken advantage of.

In an effort to spread her knowledge to as many people as possible, Beeston turned to education. She’s taken to social media and has amassed nearly 100,000 followers across her platforms, with many of her YouTube videos garnering tens or even hundreds of thousands of views.

“Education has been the cornerstone of the business,” Beeston said. “If I can save people from the house-poor nightmare, whether they work with me or another lender, I have done my job and can sleep at night.”

Her focus on VA lending is near and dear to her heart. Her father and grandfather each served in the Navy, and her father was able to use the GI Bill to go to law school. Beeston saw firsthand that military benefits, VA loans included, can be game changers for entire families. But she saw a problem with the system: VA mortgage costs can vary wildly from lender to lender, since companies are free to set their own rates and fees.

Once she noticed this disparity, Beeston said, she saw it every day. She started making videos on her YouTube channel about it, leaned into VA origination to serve as many borrowers as possible and encouraged veterans to spread the word. “I will retire when VA buyers are known as the most aggressive shoppers and the VA market is similar to conventional, with lower rate disparity,” Beeston said. “That is my mission.”

Her strategies have worked. In 2021, Beeston originated 348 VA loans to the tune of $126 million in volume. She placed 13th in Scotsman Guide’s Top VA Volume rankings and was the top woman originator in the category. Her purchase business grew further in 2022, thanks to rate-lock options for her clients and fully underwritten preapprovals.

Beeston said she expects business to remain about the same in 2023. She and her husband are taking time this year to focus on finding new hobbies after recently becoming empty nesters.

“This is a new era of figuring out what makes my heart sing,” Beeston said. “I have a few surf camps set up. So, by the end of the year, I will either be a surfer, or someone with some great stories about almost drowning and being whacked by a board multiple times. Either way, it will be entertaining.” ●

Tips of the Trade

Being a lender can be very stressful and without solid support you can feel alone. Having a network that you can joke with and learn from is critical. Treat your clients the way you would want to be treated. Would you want to get ripped off and lied to? Baited and switched? End up house poor? No. Do what is best for them and your business will grow. Only think about money and yourself, and a lender like me will take you out.

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John E. Bell III, U.S. Department of Veterans Affairs

Jim Davis — Thu, 01 Dec 2022 09:00:00 +0000

The number of home loans guaranteed by the U.S. Department of Veterans Affairs (VA) plummeted over the past federal fiscal year. The agency saw a record 1.44 million loans guaranteed in fiscal year 2021. That dropped to nearly 750,000 in fiscal year 2022, which ran from Oct. 1, 2021, through Sept. 30, 2022.

The total loan volume fell to $256.6 billion in fiscal year 2022, down from a record-breaking $447 billion in the prior year. Veteran borrowers were at a disadvantage in the then-hot housing market, where they competed against all-cash buyers and investors, said John E. Bell III, executive director of the VA’s loan guaranty service. That changed, however, as speculators left the market this past summer.

If there’s one point that Bell wants to get across, it’s that VA loans offer remarkable benefits for veterans. “If you’re not making a VA loan to a veteran that qualifies, you’re costing them money,” Bell said. “If you’re a lender, why aren’t you offering it? Because we still see that it’s the best product out there for our vets.”

Bell recently spoke to Scotsman Guide about the VA loan program and the changing housing market. He also spoke about the VA’s ongoing modernization efforts and its goal to ease restoration of entitlement, or how veterans who have used the VA guarantee can restore the benefit for future use.

We know that rising rates don’t necessarily kill the market. Rising rates with declining appreciation, that could cause issues.

How is the cooling market affecting VA loan borrowers?

Let’s just talk some real numbers here. For fiscal year ‘22, we have seen the third-best year on record for the VA for total loans, the third-best year for purchase loans and the highest we’ve ever seen for cash-out refinances.

Why did the numbers decline?

If you really dive into why, it’s that veterans went through half of (fiscal year 2022) unable to compete in the marketplace. Institutional investors, cash investors were flooding the market, driving prices up, and veterans weren’t even being considered in the bid.

That changed?

From July to now, we’ve seen veterans compete more and more, winning bids and contracts at a very fast pace. It’s because, again, those institutional investors with cash buying investment properties left the marketplace and left it rapidly.

Do you think this trend will continue?

We know that rising rates don’t necessarily kill the market. Rising rates with declining appreciation on housing prices, that could cause issues. We’re all waiting because we’re seeing pockets of declines in certain markets.

Can you talk about the efforts to modernize the VA loan process?

This is just another way for us to decrease the time it takes to guarantee loans and to keep the price down as much as possible. We’re really trying to work with Ginnie Mae, work with our lenders to make sure that during the transaction, they can go sell that mortgage-backed security on the day they close so it keeps the price down.

The modernization efforts aren’t on the front end with borrowers, but the back end with lenders and the secondary markets?

Exactly. It’s tying in that whole process together. It’s really end to end of the loan life cycle. The other thing that this allows you to do is make policy decisions on the front end, based upon the historical information on performance that the back end is telling you.

What are the issues surrounding the restoration of entitlement through refinancing?

We’re tackling it right now. With every great technology, you’ve got to have the infrastructure in place to be able to support it. In the next eight to 10 months, we’re going to require that lenders report to us electronically with data from every transaction. Once we’re able to get that data into our system, we can start building the rules on that restoration of entitlement.

When do you foresee the VA potentially getting an automated underwriting system?

We are one of the only program agencies that does not have an automated underwriting system. We are trying to fix that. That’s in our modernization transformation, (where we’re trying to find a) way for us to be able to understand which veterans are not making it across the finish line. We’re hoping and striving to get toward that after (the current modernization efforts). ●

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2022 Top Mortgage Lenders

Hannah Darden — Tue, 31 May 2022 17:00:00 +0000

If 2020 was a successful year for the mortgage industry, then 2021 was triumphant. Record-low interest rates and record-high home prices led to the highest-ever mortgage origination volumes by Scotsman Guide’s Top Mortgage Lenders. These companies set new records while adapting to the ever-changing COVID-19 pandemic, remote work, client migrations and thinning housing supply.

A March 2022 report from Upwork estimated that 4.9 million Americans have moved due to remote work since the start of the pandemic while another 19 million are planning to move for this reason. Now that millions of potential homebuyers have the freedom to live wherever they would like, the market has heated up in new parts of the country. While coastal and dense urban areas are still popular — and homes there are selling fast and for high amounts — many workers have chosen to move to historically less expensive areas like the Sun Belt. In certain cities such as Phoenix, Tampa and Las Vegas, home prices soared by 24% or more from 2020 to 2021, according to a Redfin report.

These migration patterns meant more opportunities for the Top Mortgage Lenders to expand and increase their business across the nation. And they did exactly that, closing more than 6 million loans for an aggregate volume of $1.9 trillion in 2021. This represented an impressive increase of 1.1 million loans and $400 billion in volume from the 2020 production year.

Scotsman Guide’s 10th annual Top Mortgage Lenders rankings is topped by a new name. PennyMac Loan Services LLC took first place on the Top Overall Lenders list with $234.5 billion across more than 789,000 loans. Familiar names, however, round out the remainder of the top five. Second place went to United Wholesale Mortgage (UWM) at $226.5 billion, followed by loanDepot ($137 billion), Newrez LLC ($97.6 billion) and Homepoint ($96.2 billion). Pennymac and UWM each broke records as the first companies to cross the $200 billion marker in these rankings.

The following pages also contain the usual spread of specialty rankings. loanDepot remained in first place on the Top Retail Lenders list at $116.2 billion, a 34% increase from the previous year and the first company to break $100 billion in the retail rankings. UWM remained in first place for Top Wholesale Lenders at $226.5 billion, a staggering year-over-year increase of 65%. Pennymac took the crown in the Top Correspondent Lenders rankings, doing 74% of its business in this category for a correspondent loan volume of $174.6 billion.

Fairway Independent Mortgage Corp. took first place in the Top Non-QM Lenders category at $6.2 billion, followed by Angel Oak Lending at $3.9 billion. The government lending categories also saw a boost in volume in 2021, with rankings newcomer Pennymac sweeping the top spots in the Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loan categories.

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PennyMac Loan Services LLC, No. 1 Top Overall Lender

PennyMac Loan Services burst onto the scene this year, taking the No. 1 spot in Top Overall Lenders in its first year of entering the Top Mortgage Lenders rankings. Doug Jones, president and chief mortgage banking officer for Pennymac, credits his team and recent technological advancements for the company’s wildly successful 2021.

“Looking back, it’s really a mix of having great business partnerships as well as a highly talented team, technological excellence and solid execution,” Jones said.

Pennymac invested heavily into correspondent lending technology as well as its broker platform, pricing engine and internal tools, Jones said. The company’s focus on tech in recent years also helped Pennymac weather the COVID-19 pandemic and the shift to the virtual environment, he noted. Digital infrastructure ensured that borrowers’ needs were “always at the forefront” and that the company never needed to pause the funding of loans. This consistency is part of the “secret sauce” for Pennymac, Jones said.

While big-picture focal points for Pennymac include technology and reliability, along with a healthy company culture and core values, the day-to-day processes at Pennymac are focused on the client. “Our focus is to be great on every loan, for every customer, on every part of the process, every day,” Jones said. “It’s all about executing for the customer.”

Although there has been some economic uncertainty this year due to rising inflation and mortgage interest rates, Jones said that Pennymac is “well-positioned to support our partners and their customers.” His advice for other lenders navigating economic uncertainty? “The best way to navigate uncertainty is to rely on fundamentals,” Jones said. “It’s back to basics.”

Doug Jones

President, PennyMac Loan Services

Overall volume soars upward yet again

The Top Mortgage Lenders did more business than ever in 2021, closing more than $1.9 trillion in loans. This represented a 30% increase from last year’s $1.5 trillion in loans, and an impressive 205% increase from only five years ago, when aggregate loan volume was slightly more than $635 billion.

The 100 lenders on this list also closed more loans than ever at 6 million, a 23% increase from the 2021 rankings. And the competition has heated up for the No. 1 Top Overall Lender spot as the total loan volume for the winning company in this category has soared by 337% in the past five years.

Remote work has permanently altered the homebuying process

The rise of remote work during the COVID-19 pandemic has led to major changes in mortgage borrowing. According to the 2022 Borrower Insights Survey from ICE Mortgage Technology, nearly 75% of borrowers believe that an online mortgage process is easier than an in-person process. Many homebuyers have relocated during the pandemic (with Sun Belt cities such as Phoenix, Dallas and Orlando seeing the most in-migration) as remote work has allowed them to look further afield for their dream homes. Among homeowners who relocated for work over the past two years, 61% reported that the ability to work remotely was the main driver for their move.

This has driven a surge in technology as Realtors and originators have developed ways to remotely sell homes and close loans. Digital mortgage processes are especially important to millennial and Generation Z borrowers, who reported that their choice of lender was strongly influenced by the availability of online applications, document portals and mobile apps.

Only three years earlier, the ICE survey indicated that 52% of borrowers used an online application, but this share jumped to 64% in 2021. As mortgage applications have shifted into the digital space, lenders also have become increasingly responsive. Seven in 10 surveyed borrowers said they were contacted by their lender within 12 hours of submitting an inquiry, a sign that lenders are taking advantage of digital tools to streamline their application processes.

Despite rate hikes, home-price growth stays strong

U.S. home prices rose by 1.6% on a monthly basis this past January, a slight increase from the 1.3% growth in December 2021, according to the Federal Housing Finance Agency’s House Price Index (HPI). Year over year, home prices for purchase transactions closed through Fannie Mae and Freddie increased by 18.2%, driven by strong demand and limited supply.

Rising prices differed across the nation’s census divisions, with monthly increases at this time ranging from 0.1% in the New England region to 2.2% in the South Atlantic states. From January 2021 to January 2022, the lowest price increase was in the Middle Atlantic region (at 13.3%). During the same period, prices rose by 23.1% in the Mountain region.

“Rising mortgage rates in January certainly reflect a major change from the past several years, but lending costs remain relatively low,” FHFA supervisory economist Will Doerner said in the HPI report. “The mortgage rate shift has not dampened upward price pressure from intense borrower demand and limited supply.”

Large states power increase in VA loan volume

Home loan volume through the U.S. Department of Veterans Affairs (VA) soared across the nation in 2021. More than 1.4 million loans totaling $447.2 billion were closed, a 19% increase from the 2020 volume. According to data from the VA, California led the pack in 2021 with $64.8 billion in VA loan volume.

Virginia, Florida and Texas followed, with each state’s volume topping $34 billion. Washington, Colorado, North Carolina, Arizona, Maryland and Georgia rounded out the top 10, with each of these states reporting more than $16 billion in VA loan volume.

While California’s high home prices and large population led to the highest overall VA lending volume, it came in third for average loan size. Washington, D.C., was No. 1 in this category with an average VA loan size of $616,518 while Hawaii was No. 2 at $588,199. California’s average VA loan size was $458,361.

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VA issues more than $400 million in loan-fee refunds

Arnie Aurellano — Thu, 10 Oct 2019 19:55:00 +0000

The U.S. Department of Veterans Affairs (VA) announced that it has returned more than $400 million of erroneously charged mortgage fees to borrowers as part of an “aggressive initiative.”

The refunds, according to a statement from the VA, came after an internal review of “millions of VA-backed home loans spanning almost two decades.”

Typically, veterans receiving VA-backed mortgages must pay a funding fee, which reduces the cost of the loan to taxpayers, since VA loans have no monthly mortgage-insurance premiums and require no downpayment. Disabled veterans are exempt from paying the fee, but an inspector general’s report released earlier this year uncovered that at least 53,000 disabled vets had been mistakenly charged.

“VA staff worked diligently throughout the summer reviewing 130,000 cases, which is an average of 16,000 loans reviewed per week,” VA Secretary Robert Wilkie said. “This effort included loans dating back nearly 20 years. Our administration prioritized fixing the problems and paid veterans what they were owed.”

The mistakenly charged fees were due either to clerical errors or to veterans whose exemption status changed when a disability rating was issued after their loan closed. Refunds ranged from “a few thousand dollars to more than $20,000 for some individuals,” according to the Military Times. The publication also reported that the refunded amount was “significantly above the nearly $290 million total investigators estimated earlier this year.”

The VA mailed letters to notify veterans who are eligible for a refund. Additionally, the VA announced several internal changes to ensure that both borrowers and lenders are provided with up-to-date information regarding funding-fee exemption statuses. These changes include policy guidance that directs lenders to inquire about disability claims during the underwriting process, as well as regular internal oversight to properly identify veterans who are eligible for fee waivers and refunds.

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