Real Estate Mortgage Network’s chief executive said he had his best year in the mortgage industry in 2012, but believes that 2013 could be even better.
The Edison, N.J-based company closed almost $5 billion in loans in 2012, of which 57% was retail and 43% wholesale, which company CEO Peter Norden said was “virtually opposite” of what the split was in 2011 (46% retail and 54% wholesale).
“However, I will tell you our wholesale (market share) will probably be 50-50 going forward, because we added the HomeBridge unit in California,” he said, adding that correspondent will be entering the mix as well. That channel, operating out of Irvine, Calif.-based HomeBridge, is expected to start purchasing loans during the current quarter.
“I have been in this for 36 years and I can candidly tell you 2012 was the best year I’ve had in my 36 years,” he declared. From the retail perspective, REMN opened 43 new branches bringing its total to 82. It hired another 225 new retail mortgage loan originators and coast-to-coast the total is close to 500.
And it anticipates continued growth in the retail and third-party channels.
“From a profitability standpoint, I don’t think any of us have seen margins on prime originations at levels like this, which is the reason why profitability is as high as it is for pretty much everybody in the industry in 2012.
“And certainly 2013 is beginning the same way, Norden commented, but he warned competitive pressures are starting to cause margins to compress. But he doesn’t think the drop-off from the current level would be dramatic.
REMN is projecting about $3.5 billion in retail closings in 2013. The company is working on some acquisitions of large retail branch groups, and it is possible the company by the end of the first half of the year will be over the 100 office level.
Norden said REMN is a purchase-oriented company; at a time when refinance application volume was in the 80% range for most of last year, only 40% of REMN’s business was refinance.
“With us concentrating on the purchase side of the business, we anticipate that our volume will climb this year,” with total closings projected of $7.2 billion.
He believes there will be an uptick in interest rates in the second half of this year, albeit not a dramatic increase, but enough that it will affect any remaining refinance business.
Purchase business is generated through relationships and Norden considers that one of the reasons why Realtors and builders look to work with his retail offices is because of quick turn times. Purchase loans are done “soup-to-nuts” typically in three-to-four weeks, he said. Such service levels are also attractive to those mortgage sales people looking for a new home as well.