Maintaining Production As Industry Declines

Mortgage applications are down 16% from their level a year ago, according to data from the Mortgage Bankers Association, and are down more than 50% since May 2003.

Leah Osterhoudt, a mortgage broker for Tempe, Ariz.-based United Mortgage Financial Group, Inc. said she has built up a wide customer base over the last two years using an upfront broker model which has helped with referral business and hopes to include more commercial lending business to offset the decrease in refinancing.

“Here in Arizona there has been a lot of new construction and they had higher rates or they are refinancing to use the equity” to lower their loan-to-value, she said of her refinance volume.

“It’s kinda scary with things slowing down,” she remarked.

But, business volume has held steady so far and she said purchases are “still going pretty good” while some previous clients are now coming back for home equity lines-of-credit. The company, she added, is also focusing on a for-sale-by-owner program and developing more relationships with realty agents by getting involved with state Realtor associations, in which she attends three meetings a month.

They are also getting into the commercial lending market.

“I’ve found in doing some research in commercial lending, that when the residential lending slows, the commercial increases,” she told MortgageDaily.com. “Realtors don’t have many choices when it comes to a lender that does large scale commercial lending.

Dennis Hightow, a loan officer for 17 years currently working with Seattle, Wash.-based Washington Mutual said he credits his continued success by doing more business with homebuilders. He said his volume is up five percent from last year’s first quarter, despite the industry slowdown.

“It’s not the easiest thing in the world to create business that is not there,” he told MortgageDaily.com. “We’ve got some good opportunities in the market, we are doing business with a number of new home businesses, and a lot of equity loan business which is new for us.”

He also credits his longevity in the industry in developing a large customer base. “Not a day goes by we don’t get two or three calls,” Hightow said. “We are lucky; I just get the calls.”

On the other side of the continent, Steve Parnell, CEO of Boca Raton, Fla.-based Lynxbanc Mortgage Corp., said that “relationship marketing with existing clients does have a steadying effect” but the company has seen a downturn in business of about 25 percent from last year’s volume.

“January was painfully slow, February and March recovered quite well but April has slowed again,” he told MortgageDaily.com in an e-mailed statement.

Parnell said overall they might expect a 25 percent decrease in business. “If we are down 25 % overall for the year it would be acceptable as 2005 was such an outstanding year,” he said in a written statement. “If companies thought that 2005 was how it was going to be forever they are in trouble.”

Parnell said Lynxbanc would continue to use a mix of print advertising, client retention programs, expert articles in relevant publications and Web site optimization to market their company, which says it is the “Official Mortgage provider to Florida Association of British Business.”

In the Midwest, Southfield, Mich.-based Capital Mortgage Funding VP Billy Slobin said although rates continue to rise he expects to do more business this year than the last thanks to a client base that has been growing for the past 21 years.

Slobin told MortgageDaily.com that he networks within the community and is a coach for high school and youth football leagues, which has become a good source for prospects.

He said last December and January were slow but business began to pick up for him in February and hasn’t slowed down.

“I just press forward and aggressively close as many loans as I can,” he said.