“As a company we have always tried to remain extremely conservative with decision-making, making sure we are not doing anything to put the company in harm or put our customers in harm’s way by jumping on any bandwagons before we know exactly what we are doing,” she said. “I know quite a few companies have been getting their agency approval and some of them have been fast-tracking things like that and we have a tendency to take it slow and steady, making those good decisions on behalf of our customers.
“So about a year ago we had set a strategic initiative for the company to go ahead and apply for that agency approval with Fannie. We also applied with Freddie Mac,” Badciong said, noting that at the time of her interview with this publication at deadline last month, the latter approval also was “almost complete.”
She said the company wanted to obtain agency approvals as a form of “counterparty risk management…so that if any other correspondent lenders, such as Bank of America, decide to exit that business channel” the company has optimal execution options for its customers.
“You want to make sure that you don’t have all your eggs in one basket so that you have a variety of execution options,” Badciong said. “Everybody’s appetites change over time.”
The company has been slowly diversifying its geographic markets as well.
Over the last couple years it has expanded from its original license in Massachusetts further into the New England market, developing a presence in New Hampshire, Rhode Island, Maine and Vermont. Further west, it has been active in Kansas City/Overland Park, Kan., and at deadline had hired a manager and was looking to open a new office in Lee’s Summit, Mo. It also was working on making further inroads into Minnesota.
Badciong said the company expands in part based on the market prospects, but also based on interest in individual talent and hires only W-2 employee retail channel originators.
“They have to be a very good model match for us,” she said, adding that they need to share the same philosophy as the company when it comes to how to best treat customers and protect the company’s business.
The company most recently has been originating primarily agency product, constituting roughly 60% of its business, but also provides FHA, USDA and VA lending.
She noted that changes in government mortgage insurance premiums have been continuing to push borrowers toward more affordable private mortgage insurance programs available in the market. VA lending, she said, has been particularly in demand as veterans have been returning from overseas assignments in the Middle East.
“It’s nice to help out” these borrowers, she said.
Badciong said the company’s pickup in purchase volume has been active and filled in as refinancing has scaled back with the recent upward trend in interest rates as the loan mix has gone from being refi-dominated last year to purchase-dominated this year.
She said at deadline the company in line with its goals to meet or exceed last year’s volumes was originating on average roughly $70 million in volume per month for 2013 although she noted that whether this is sustainable remains to be seen.