Equity Loans LLC may have recently added four retail production offices, but the Atlanta-based company’s president believes its future is in diversifying its stream of income and its production capabilities.
The company was recently approved as a Fannie Mae seller/servicer and is waiting on approvals from other secondary market agencies, said Eddy Perez during an interview at the Mortgage Bankers Association’s National Secondary Market Conference in New York.
But not only is it going to be retaining mortgage servicing rights, it has put in place the technology to add a wholesale production channel which will also help to build the portfolio. That channel should be operational in the near future. It is also considering becoming a correspondent as well.
The goal is to be diversified enough to be covered if something happens, but not too diversified where things are spread too wide, Perez continued.
Equity has a heavy east coast orientation. One of the lessons from Hurricane Sandy was to have diverse geography both in terms of its clients (many of whom were impacted by the storm) and in office locations (the storm damaged a number of offices), he said.
It recently celebrated its fifth anniversary; it now has approximately 28 branches and more than 250 employees.
Right now the company is 100% retail but its presence is heavily on the east coast. Of the four new offices, one is in Chantilly, Va., and another is in Mount Pleasant, S.C. The other two are in Southbury, Conn., and Wenatchee, Wash.
Before becoming a seller/servicer, Equity Loans sold its production to aggregators like Bank of America; most of the large aggregators have exited the business.
Perez said he supports the independent mortgage banker model. But the only way to remain successful in the business is to get the secondary market approvals.
Being able to sell to the agencies also will help Equity Loans recruit loan officers. Perez said loan officers want to work with organizations who can sell to Fannie Mae, Freddie Mac and/or Ginnie Mae.
Gaining seller/servicer status, he continued, means the company meets higher standards.
As for the servicing business, Equity will use a subservicer, although it has also hired an experienced servicing manager because it is important to look after the subservicer’s operation.