All of the major mortgage industry economists are predicting that 2012 will see a decline in originations from 2011. Yet, instead of retrenching, several organizations are predicting increased volume and acting upon that by expanding their retail branch networks.
Matthew Clarke is the chief operating officer and chief financial officer for Brentwood, Tenn.-based Churchill Mortgage Corp. In an interview with Origination News, he said the firm believes it will achieve 20% growth this year. It closed about 5,000 units in 2011 and expects to do about 6,000 in 2012.
It will achieve this growth from its existing branch locations as well as adding new ones. In December 2011, Churchill opened a branch in Franklin, Ky., that will serve borrowers in Russellville, Scottsville and Bowling Green, Ky., as well as in several neighboring Tennessee communities including Portland, Springfield, White House, Gallatin and Hendersonville.
“We've had some success in the last couple of years adding three or four offices a year, nothing crazy, but trying to do it in a responsible way that we can support,” Clarke said.
For 2012, Churchill expects to add another three or four offices.
Churchill, as a company that sells most of its product through conduits, needs to rely on Fannie Mae and Freddie Mac to get their automated underwriting engines before it can offer the HARP 2.0 program. Once that happens, Clarke feels there is a good opportunity to generate new business.
As for nonconforming loan investors, they are not coming back into the market as quickly as the company would like and as aggressively as the company would like, “but they are out there,” Clarke said.
He compared getting secondary market investors with recruiting loan officers. “Looking for places to sell your loans is a daily discipline. It is something you have got to do on a consistent basis. So as players bounce around as they've tended to do over the past couple of years, we've got to make sure we have an inventory of new investors we are working with.”
Clarke said the environment to recruit loan officers is tough right now. Among the factors was that this past fall was good for many producers and when they have a full pipeline they are reluctant to switch companies and walk away from that, he noted.
“I will say, we've had luck,” noting the company had five new LOs working out of Brentwood. After the interview was completed, Clarke was going to a new branch office opening ceremony in Jackson, Tenn.
“Recruiting is not something you do every now and then, it's something you got to consistently do,” Clarke declared.
Supreme Lending, Dallas, has added five new offices in Alabama. With their prior organization, these branches were doing a total of $500 million per year.
“We have aggressive growth goals for 2012 and these new branch managers, who are some of the top producers in Alabama, are a big part of meeting those goals,” said James Iley, Supreme Lending's senior vice president and national production manager. “This is just the beginning of our expansion efforts for the coming year. We have plans to continue our Southeast expansion with branches in Georgia, Tennessee and Kentucky as well as a major addition in Florida.”
Company founder Scott Everett said the reason for branch office expansion is so Supreme's volume doesn't decline.
With downturn, some of the competition obviously closed up shop, and this has made a lot of talented people available for his firm.
“I think at the end of day, what we're all left with is the creme-de-la-creme of mortgage originators. And those are the one's we're going after now,” he said.
Supreme has branches in Alabama, but it had an opportunity to pick up a top originator, Shannon Fortner, who is now the branch manager in Huntsville.
Everett feels that as loan officers are looking to gain a little bit of edge and Supreme reputation as a technology-proficient organization helps to get people gravitating towards it. The company has been named as a tech-savvy lender by ON sister publication Mortgage Technology three years running.
Other things that attract people to organizations like Supreme, Everett said, are product diversification and the parent company's balance sheet strength.
It has been active adding offices in other states besides Alabama in recent months. In 2011 Supreme did origination volume of almost $2 billion and its 2012 goal he said, is to double that.
Kevin Stitt, the president of Gateway Mortgage Group, Tulsa, Okla., echoed the sentiments of the other lenders. His company had its best year ever in 2011 and he believes that was just the start.
But, it is taking its growth opportunities “very conservatively, and we're going after proven originators in markets that we want to be in and offering them a better mouse-trap to join our group,” Stitt said.
Gateway wants top branch managers who have been successful in other organizations, particularly in a retail environment. He said these people are tired of how the bigger banks they have been working for are treating them.
“We have the best of both worlds. We are a medium-sized mortgage banking operations that has all of the things the big banks can offer.
“We service all of our own loans and that enables our loan officers to create long-standing relationships with their borrowers. They seem to really like that,” Stitt said.
Last year Gateway added about 20 new branches, bringing its total to 50. During the year it cracked the $1 billion mark in mortgage servicing rights and it has been beefing up that platform as well.
Its technology platform, MortgageFlex, is centralized and handles the front end of the transaction all the way through servicing. “So we feel like we're the ideal balance; we offer the independence or the autonomy for the branch manager but with all the support, back end structure and systems all the way through servicing that allows them to brand themselves to their borrowers so they can really create customers for life,” he said.
For 2012, Gateway is looking to hit $1 billion in originations and add another 15 to 20 branches. On the servicing side, it should hit $2.5 billion.
And it is not just origination personnel Gateway is able to add because of market dislocation. Stitt said it has been able add experienced operations staff to support its branch growth.
