WE’RE HEARING that although some big players have exited wholesale in recent years, New York mortgage brokers today have the support of several strong, small to midsized lenders in this channel and are seeing a rebound in business.
New York Association of Mortgage Brokers president Lou Borsellino told us at the group’s annual wholesale meeting that the event reflected resurgence in the market this year, and vice president and events chair Irene Amato told attendees several wholesalers have “stood by our side in rough times.”
In contrast to the big, publicly traded financial institutions who dominated wholesale lending in the past, today’s wholesale market participants often are more community-oriented.
Art Saitta, assistant vice president, business development officer, Ridgewood Savings Bank, described Ridgewood, for example, as a “local mutual savings bank” supporting financial literacy in grammar and middle schools as a way to reach and educate customers.
“We don’t have stockholders,” he stressed. “We only lend our own money.”
Players in the wholesale market today also tend to have closer ties to the servicing market, as evinced by Nationstar’s push into third-party origination channels.
Speakers at the meeting indicated wholesalers today are often willing to fund a slightly wider range of products such as co-signed co-op loans, nonconventional/jumbo loans, 203k government loans, Home Affordable Refinance Program 2.0 loans, USDA loans, VA loans, foreign-national loans and commercial loans, carefully expanding parameters as they anticipate a shift to purchases and slower refinancing.
The focus on the latter was reflected in a widely requoted question asked during the wholesale lending conference by Saitta: “Are you ready for the purchase money business?”
To get ready, we are hearing that mortgage originators are working hard to figure out how to deal with some of the fallout from the recent downturn as they work to help the market recover from it. As Saitta advised them to “keep in mind,” inventory in some areas is the lowest seen in the market since 2006. There also has been a wave of modifications and short sales that can be a challenge when it comes to origination as it affects some borrowers’ credit profiles.
Saitta believes it is “consumer confidence” that will drive the shift to home purchase loan originations, and mortgage brokers can have a hand in that.
Bonnie Sinnock is managing editor of National Mortgage News and editor of Origination News. She has been covering the mortgage industry since 1995.
