From the editor
BY JENNIFER E. GARRET T, EDITOR
BY SARAH W YAT T
Although many originators prefer to specialize in a particular market, CMG Financial’s rodrigo ballon thrives
on variety. He closed more than 276 loans in 2012 in his
Southern California territory. That volume largely came
from Federal Housing Administration (FHA), conventional
and U.S. Department of Veterans Affairs (VA) loans.
“I do it all,” ballon explains. “I have noticed a shift of
about 35 percent from FHA to conventional [recently].
Second and third quarter, the FHA changed the rules, so
some people switched to conventional.”
Within that variety, however, ballon does a large percentage of purchase loans. In 2012, he closed more than
$75 million in purchase volume, which accounted for
91 percent of his overall volume. ballon, who has worked
in the mortgage industry for nearly a decade, says he
has enjoyed encountering “better-qualified” applicants
“More people are qualifying for conventional loans,”
ballon says, “whereas before, they’d go for FHA loans.
I can do it all for the first-time homebuyer.”
ballon’s total volume so far this year is more than $98 million, which would be an increase over his 2012 total volume of $83,027,985. He attributes his achievements to
several factors, including the quality of his staff and colleagues, but he also sees the increased consumer confidence as a factor in the new business he’s experiencing.
“The market is doing fantastic,” ballon says. “Almost everyone in the industry is showing profit. In 2014, if the increase
in prices continues, we’ll probably see more short-sells.
right now, there is a lack of inventory.”
ballon enjoys watching new building developments
emerge in his native San Diego, particularly on the east
side of the city.
“I also have been seeing a lot of new construction,” he says.
“The flippers are now going for new buildings.”
beyond that, ballon says that he is largely driven by the
desire to continuously grow his sales.
“Success motivates me,” he says. “As a top producer,
if I see the market shift in a backward direction, it’s time
for me to hit the field and go back to the basics and call
all my A, b and C agents. This way, I can capture more
Sarah Wyatt is an associate editor at Scotsman Guide. reach her at
(800) 297-6061 or firstname.lastname@example.org.
NO. 18 TOP PURCHASE VOLUME (2012)
For the fourth year in a row, we compiled what we
believe is the industry’s most comprehensive list of the
nation’s top mortgage originators, brokers and more.
View Scotsman Guide’s Top Originators 2012 rankings at
The end oF The yeaR oFTen iS a TiMe To Look BaCk
— and To Look ahead.
This year was a busy one for mortgage professionals, and as 2013 draws to a close, it may
be helpful to reflect on the events of the past year and the changes they have brought
about. This month’s backSpace feature is a special two-page timeline, chronicling critical
points throughout the year and their effects on the industry. Look back on the year that was
on Page 112.
First Financial bancorp’s rick Tobin also takes a historical view of the mortgage industry
on Page 30. by reviewing the events that have brought the industry
to where we are today, mortgage professionals
can best prepare for where the industry
Although 2013 is coming to a close,
2014 is just around the corner, and
many are curious as to how the mortgage business will fare in the coming
months. Uncertainty abounds — from
when and how quickly interest rates
will rise to what the federal government will do next — but many agree
that the purchase market will continue to
grow as refinance volume shrinks.
In fact, the Mortgage bankers Association (MbA) predicts that
purchase originations will increase to $723 billion next year, up from
$661 billion in 2013. refinances, on the other hand, are expected to decline to
$463 billion from $1.08 trillion in 2013.
Overall, the MbA anticipates $1.2 trillion in mortgage originations in 2014, a 32 percent drop
from 2013 originations. The organization also expects interest rates to increase to more than
5 percent in 2014 and as high as 5. 3 percent by the end of 2015. As interest rates have been
kept to historic lows for many years, it is inevitable that they will begin to increase again —
especially as the economy begins to improve.
Increasing interest rates will affect mortgage brokers’ and originators’ business in many
ways. Fidelity bank’s Joe bauer examines purchase-volume trends and offers seven
points for mortgage professionals to consider when planning for the year ahead on
Page 48. Interest rates are of concern to all mortgage originators, but particularly those
who specialize in jumbo loans. GuardHill Financial Corp.’s Julie Teitel takes a look at how
originators can help their jumbo clients weather the rebound in rates on Page 90.
Jumbo loans aren’t the only niche that will be affected by increasing rates, however. As
refinances taper off, the MbA anticipates that home-equity seconds will be preferred over
cash-out refinances when borrowers want to tap the equity in their homes. Home equity
lines of credit (HELOCs) were quite popular before the downturn, and many of these credit
vehicles are set to amortize soon. Mortgage bankers must prepare themselves for the risks
associated with working with HELOCs. Find out more from riskSpan Inc.’s Allen H. Jones and
Leah Price on Page 41.
Another trend to keep an eye on in the coming months is the move toward paperless
mortgages. The mortgage industry may be one of the most paper-intensive operations
in the world, with as many as 500 pages of documentation generated per loan. All of
this paperwork comes at a cost — one that hits your company’s bottom line. On Page 53,
eFileCabinet’s Matt Peterson asks: With electronic origination growing in popularity, are
paper-based mortgages about to fold?
As we move into a new year in the mortgage business, Scotsman Guide is here to keep you
up to date on the trends and latest projections of industry experts.