In just 22 months in business, Willie Newman has built Cole Taylor Mortgage from nothing to an operation that recently did $200 million in production in a single month.
The mortgage unit does both retail and third-party originations, is active in 30 states and has 10 retail production offices in Georgia, Pennsylvania, Illinois, Michigan and Kentucky. The Ann Arbor, Mich.-based mortgage company is part of Cole Taylor Bank, Rosemont, Ill., a company in which many former ABN Amro employees ended up with after the Dutch-based company divested LaSalle National Bank.
Newman is the former executive vice president of ABN Amro Mortgage Group and the president of its subsidiary InterFirst Wholesale Mortgage Lending. Many of the mortgage company's staff are also veterans of AAMG and InterFirst.
Cole Taylor had a mortgage business which it had shut in early 2000 and for many years it had only been active in its retail banking footprint.
Newman was hired in December 2009 and within a few weeks had the business up and running. When he and his team were looking to get back into the business, they decided it would be a better opportunity to be a part of a financial institution, especially one that understood the mortgage business because of the prior ABN Amro connection in bank management.
He explained the original business model was to be diverse, and given the uncertainties of the market at the start of 2010, rather than having one channel or another, they decided to have multiple channels and see how things shook out. Being diverse helps from a workflow and a revenue management standpoint.
Furthermore, Newman pointed out that much of the team's background was in the wholesale channel. The company is approved by Fannie Mae, Freddie Mac and the Federal Housing Administration.
Another benefit of being a startup is that it did not have any of the legacy issues that much of the industry has been dealing with, he said. The branches are located where the company was able to find the right people to start building the business.
Cole Taylor's wholesale operation is centralized in its Michigan headquarters. There are now 200 people working for the mortgage unit.
It started retaining a small amount of the servicing rights on its originations, which are being handled by a subservicer. Newman said his ambitions do not include being as large as his previous employers, but the addition of servicing is a part of the diversification strategy.
It does have a correspondent channel, but that line focuses on originators looking to make the move from being a mortgage broker to being a mortgage banker. Towards that end, it has just started to be a provider of warehouse lines of credit to these originator clients.
The aim is to “keep that independent originator functioning as they see best,” he said. Cole Taylor's mortgage broker clients were asking for this channel and Newman pointed out that one of the fortunate aspects of being part of a bank is that it can provide this kind of menu of services to its clientele.
One of the things that the InterFirst operation had been known for was its technology platform. But to start the new operation in the speed that it did, Cole Taylor Mortgage relied on off-the-shelf technology.
Now, it is getting to the point where Newman is getting ready to take the operation to do some of things management is known for historically technology-wise, such as a direct to consumer channel similar to Mortgage.com.
As for the future of the business for the next 12 months, it will be challenging, with every day something new coming up. But Newman noted, the reason why many have given up the mortgage business are those legacy issues he mentioned earlier and having to focus on them.
Meanwhile, Cole Taylor Mortgage has a management team that has built businesses in the past, albeit not in a cycle as challenging as the current one, but still experienced enough to deal with those cycles. Newman added, “We're positioning ourselves to be flexible and nimble enough to go where the market goes, to deal with what it hands us and to be able to move through it and grow.”
