"ALL YOU HAD TO DO WAS ANSWER the phone last year," says A.W. Pickel III, president of Leader Mortgage Co., Lenexa, Kansas, and president-elect of the McLean, Virginia--based National Association of Mortgage Brokers (NAMB). But now Pickel says he is "trying to get loan officers to concentrate on niche markets."
Federal Housing Administration (FHA) 203(k) loans are a specialty at Leader Mortgage, a mortgage brokerage that has offices in Kansas City and St. Louis. Pickel has put together an infomercial on these purchase/rehab mortgages, which will air on local cable TV channels. He also receives referrals from municipal housing agencies, which often get more requests than they can handle from consumers, according to Pickel.
Leader Mortgage is adding processors and clerical staff, anticipating that origination volume will be about the same this year as last, Pickel says. However, he notes some weakness in projected closings as early as February.
Pickel expects his firm's loan mix to go from 65 percent refinancings in 2002 to almost two-thirds purchase business this year. Leader Mortgage funds its own loans before selling them to wholesale lenders.
First-quarter production will stay at a similar pace to the last half of 2002, says Todd Dal Porto, managing director of Calabasas, California--based Countrywide Financial Corporation's wholesale lending division. Countrywide saw wholesale lending grow by more than 50 percent in 2002 to total 567 billion; the division is adding hundreds of salespeople annually, according to Dal Porto.
Countrywide also is enhancing its online automated underwriting system to provide loan recommendations to mortgage brokers, even when they have limited information on a prospective borrower.
Dal Porto expects to fund more hybrid adjustable-rate mortgages (ARMs) with interest-only payment options in 2003. Such loans help borrowers with low incomes and limited down payments to purchase. He also foresees brokers using monthly adjustables to cut borrower payments by offering the potential for negative amortization.
An expected increase in conforming rates later this year will provide a lift to subprime lending, says Trace Marl, national sales director for wholesale lender Millennium Funding Group, Portland, Oregon. Millennium Funding is preparing for growth by adding offices in the first half of 2003 and doubling to 30 the number of states it's approved to lend in. Marl says high refinance volume in 2002...