From the Editor
BY RAYMOND FLEISCHMANN, EDITOR
BY VICTOR WHITMAN
RPM Mortgage Inc.’s Dianne Crosby has no complaints
about 2013. In a year when the refinance boom mostly
ended and home purchases stalled nationally, Crosby
managed the rare feat of increasing volumes over her
2012 total. She did it with a near even split between purchases and refinances.
“I had a lot of fun last year,” Crosby says. “I loved it.
I loved the pace.”
Crosby works in the high-priced San Francisco Bay
area where jumbo loans are the norm. Her average
loan amount for the 384 loans she closed in 2013 was
$491,828. Compared to 2012, she increased her volume
by more than 18 percent to $188.9 million this past year.
“We are doing a lot of jumbo financing,” Crosby says.
“We are considered a high-cost area in the San Francisco
Bay Area. The big group now is getting a loan amount
from anywhere from $600,000 to $1 million, and sellers are expecting to close quickly in three weeks or less.
There are a lot of cash buyers.”
A self-described “economic junkie,” Crosby says she gets
an intellectual charge out of watching the markets move.
This past year, the most obvious change came about
when the Federal Reserve began tapering its bond-buying
program and mortgage rates began to rise, ending the lucrative refinance wave. Crosby says that although she is
focusing on the purchase market this year, she believes
people still will do refinances as they gain more equity in
“Right now about two thirds of my transactions are purchase transactions,” Crosby says.
Crosby says one challenge this year is closing loans in
a competitive market where borrowers are competing
against all-cash bidders.
“Right now I am experiencing a market with very little
inventory and buyers who are becoming increasingly
frustrated with the difficulty of getting air-tight offers accepted,” Crosby says.
“I had a client who came in third out of 21 offers. He was
$200,000 over [the listing price], 15-day close and he
was beat out by cash. The market is strong. There are
a lot of buyers out there and those same 21 people still
want to buy a house, so they are still looking.”
RPM MORTGAGE INC.
NO. 13 TOP DOLLAR VOLUME (2013)
For the fifth year in a row, we compiled the
industry’s most comprehensive list of the
nation’s top mortgage originators.
View Scotsman Guide’s Top Originators 2013 rankings at
DISTRESSED PROPERTIES HAVEN’T GONE AWAY.
Since the doldrums of the recession, distressed sales have made up a sizable portion of the
residential housing market, and even with the economy extending its rebound, that much
continues to be the case. This past year, short sales and foreclosure-related sales made up
16.2 percent of all residential sales in the United States, according to Realty Trac. That marked
a 1.7 percent year-over-year increase in this category.
Point being: Although the rate of foreclosure starts continues to drop, the housing market —
and originators — still have a wealth of distressed assets to work through. Realty Trac reports
that there are 1.2 million properties owned by banks or in the foreclosure process, and that’s
just the properties on record. The shadow inventory is another matter altogether, although this
looming threat seems a lot less scary these days, as multiple industry analysts have reported
drastic reductions in the shadow inventory’s size. Read more about this topic in this month’s
BackSpace on Page 114.
In any case, you can rest assured that distressed properties are here to stay, so it may be
a good idea to incorporate this segment of the market into your game plan for the coming
months. Invariably, many of the aforementioned properties are going to need a little TLC (and
then some), so originators should consider learning more about rehabilitation loans if they
haven’t already done so. On Page 48, Kevin Cloyd of Carrington Home Solutions LP breaks
down the Federal Housing Administration’s Section 203(k) program, which itself consists of
three distinct loan types.
The market’s inventory of distressed properties affects more than your customers’ choice of
loan, however. According to Kelevision LTD’s Kelly Guest, the recession and the subsequent
surge in foreclosures and distressed properties helped create a truly savvy customer base,
which means that originators should change the way that they approach their marketing. Read
Guest’s article on Page 40.
Of course, many originators have already made recent alterations to their marketing methods,
choosing to pursue purchase-centric business instead of refinances. One can hardly blame
them — as interest rates have climbed, refinance activity has dropped off — but originators
would wise not to spurn refis entirely. As MyMortgageInsider.com’s Tim Lucas points out in
this month’s lead feature, low interest rates aren’t the only reason why homeowners may want
to refinance. Lucas offers five tips for capturing more refi business even in today’s purchase-centric market, and the potential value of his insights is hard to ignore. Read his article on
Whatever the focus of your origination business may be, Scotsman Guide is here to keep you
in the loop. As always, we hope you enjoy this issue’s features and articles, and we hope that
you’ll check us out online, as well, particularly our recently launched news platform, Scotsman
Guide News, at ScotsmanGuide.com/News. Till next month.