CMG Mortgage Services is becoming something that is increasingly rare: a nonbank lender with strong growth and a franchise model that relies on both retail lending and loan brokers.
The San Ramon, Calif.-based mortgage banker funded almost $3 billion in home mortgages in 2010, a 24% gain from 2009, and one of its best years ever. (Most of its fundings are concentrated on the West Coast, though it has designs on other markets.)
And although loan volumes were beginning to slow a bit at yearend, the company is hopeful that it will beat the competition by providing “service and speed,” says company president Chris George.
Among its promises to customers is a pledge that it can close a loan within 15 days “but that’s only on loans we retain,” noted George.
Meanwhile, business is so good for its popular Home Ownership Accelerator loan product that CMG is talking to a handful of midsized depositories that hope to portfolio HOA mortgages, too.
“Over the past four months we’ve talked to five or six banks about buying the loans from us,” said George. (He declined to name the banks at this time.)
He stressed that CMG is more than happy with its alliance with Ameriprise Bank FSB of New York, its current investor. “But we’re looking for alternative investors,” he said. “Ameriprise has even given us a few names.”
The HOA product is an “A” paper “transactional” loan where the consumer deposits his or her paycheck directly into a mortgage account which has the effect of dramatically reducing the loan’s principal.
The customer can then use the money in the account to pay bills.
In 2010 Ameriprise bought roughly $340 million of HOA loans from CMG. The mortgages are held on the books of the acquiring bank and are not slated for sale into the secondary market.
CMG also recently began servicing loans, though it outsources most of the function to Cenlar of New Jersey.
