NewDay Financial became a Ginnie Mae seller/servicer a year ago, a move that is helping the Maryland-based nonbank hone in on a key market for the company: mortgages for servicemen, veterans and their families.
The Veterans of Foreign Wars recently designated NewDay as its exclusive provider of mortgage lending for its members. “NewDay Financial demonstrated to us that they help their customers make the right choices,” said VFW Quartermaster General Lawrence Maher.
“The company’s loan specialists are committed to working in an honest, open and respectful way with servicemen and women, veterans and their families to achieve their financial goals,” Maher said.
NewDay chairman Bruce Giacoma said, “It’s a wonderful designation and it feels very good to be assisting veterans with both forward and reverse mortgages.”
Based in Fulton, Md., NewDay originates Federal Housing Administration and Department of Veterans Affairs guaranteed mortgages, including FHA-insured reverse mortgages, which are known as Home Equity Conversion Mortgages.
Origination volume on forward mortgages is about $20 million to $25 million a month with another $5 million a month in HECMs, according to the company.
NewDay securitizes forward mortgages through Ginnie Mae and sells HECMs to investors. The company uses direct mail to reach its customers.
Giacoma, a Wall Street veteran, bumped into NewDay over two years ago while researching direct mail operations for a bank client.
NewDay has a direct mail subsidiary, Chrysalis Analytics.
“I saw the way they did the analytics and the way they approached the direct mail business and was extremely impressed,” he said in an interview.
Six months later, NewDay chief executive CEO Rob Posner asked him to be chairman of the company because of his Wall Street and secondary mortgage market expertise.
Giacoma immediately went to work on getting NewDay approved as a Ginnie Mae issuer. The approval came in August 2009, which has allowed the company to ramp up its VA program.
NewDay’s VA single-family originations have jumped 285% since last year.
“As a senior and having served in the military, I am extremely committed to the needs of the veteran,” Giacoma said.
He started working on Wall Street in the late 1970s during the development of the mortgage-backed securities market. During his career he founded and sold two mortgage banking companies to banks.
In the interview, he noted that a number of colleagues who worked for him on Wall Street are running the trading desks now.
“Because of my background, I stay very close to the dealer community and with our investors,” Giacoma said.
He noted that Wall Street is “kicking and screaming” to get back into the mortgage business.
“We have great alliances and great expectations for the future,” the NewDay chairman said.
