New Third-Party Originator Unit Targets Client Change

Starting a wholesale/mini-correspondent division at Affiliated Mortgage, a unit of Benchmark Bank, “is the right thing to do,” the president of the bank said. Credit: © Michael Flippo - Fotolia.com

In the current mortgage environment, starting a wholesale/mini-correspondent loan purchase division at Affiliated Mortgage Co., a unit of Benchmark Bank, Plano, Texas, “is the right thing to do,” the president of the bank said.

Affiliated already operates a correspondent channel and has a retail presence in a large portion of the country, said Bill Brewer, president of Benchmark Bank.

“The wholesale unit is a natural progression for us. Currently in the correspondent world, we have a lot of customers moving down or moving up in net worth categories, depending on their ability and we want to be able to continue capturing our current customer base and add to it,” Brewer said in an interview with Origination News.

The net worth requirements to be a seller to the government-sponsored enterprises are increasing. Another issue is compliance for participants in the third-party originator arena. With the added requirements, a growing number of companies who sell to aggregators are deciding they don’t want the responsibility of being a direct lender, Brewer said.

Affiliated is looking to capture business from smaller banks and retain the servicing rights.

The loans that the new channel is purchasing will be sold on the secondary market to Fannie Mae, Freddie Mac or Ginnie Mae.

Brewer said the bank and Jerry Alred, who is president of the wholesale/mini-correspondent division, share very similar business philosophies.

Alred joins Affiliated Mortgage from Houston-based Classic Home Financial Inc.

In addition to Alred, his management, underwriting, closing and customer service personnel will join Affiliated.

The team has worked with Alred for more than 15 years.

“The benefits of joining Affiliated Mortgage are exciting and numerous,” said Alred in a press release.

“Being a division of Benchmark Bank will allow us to sell directly to the agencies, offer our customers warehouse lines, have sophisticated pricing, locking and delivery systems and competitive pricing. We will add these qualities while retaining the personal customer service and attention to detail that has always been a trademark of my business.”

Affiliated started its correspondent channel in the first part of 2008, Brewer recalled.

That was during the height of the downturn, but on the other hand, the business did not have work through any legacy issues.

A large percentage of its competition in the correspondent space also have a wholesale/mini-correspondent purchase business.

Now that it has survived the biggest crisis in the industry’s history, it is ready for the next step.

“We created this strictly to do A paper. We are a bank; we are a heavily regulated institution and we like that business.

“It is the main reason we got into it.

“Jerry does that type of business and has been a customer of ours for many years,” Brewer said.

The wholesale/mini-correspondent division will be based in Houston

“The addition of the wholesale/mini correspondent division will provide Affiliated Mortgage Company’s clients with the entire suite of mortgage services,” said Mike Barnett, chairman and chief executive of Benchmark Bank in the press release.

“Our relationship with Jerry Alred and his team goes back many years and we know that we share a common business philosophy. We are thrilled to have them as part of our family.”

Adding wholesale is merely a continuation of what the company does in the third party origination channel to begin with.

Affiliated Mortgage Co.’s correspondent division purchases agency quality whole loans on a servicing-released basis from a nationwide network of mortgage lenders.

Its customers consist of banks, savings banks, mortgage banking corporations and credit unions.

“It is another progression of what we currently do,” Brewer said.

Initially, the wholesale/mini-correspondent will buy loans in Texas, and then surrounding states before branching out from there.

“We will take it a step at a time, we are not in any hurry,” Brewer said when asked about expansion plans.