Connecticut’s lenders continued to increase their purchase business in the single-family and condo markets last year, while most other areas of lending remained flat from 2012. The recovery, it seems, is a bit of a mixed bag in the Constitution State.
The Commercial Record’s Top Lenders of 2013 contain little in the way of surprises. Overall, purchase business was up last year, including purchases of condominiums and jumbo mortgages, and the refinance business dropped off – about what one would expect after interest rates spiked in June last year.
But while there’s room on the list for Wells Fargo, Bank of America and JP Morgan Chase, it’s homegrown brands like Webster Bank, Peoples United, Rockville Bank and Liberty Bank that largely dominate on the banking side. On the whole, mortgage companies outpaced banks when it comes to single-family purchase mortgages, but in every other category, banks did more volume than either mortgage companies or credit unions.
Bank lending of industrial and manufacturing mortgages remained relatively flat when considered by volume, and mortgage companies’ lending of those products sharply dropped off. Banks did slightly more commercial and retail mortgage volume last year, and mortgage companies dramatically increased their volume in that business as well.
Looking Hopefully To Spring
While Connecticut hasn’t experienced the strong comeback some of its neighbors have enjoyed, Connecticut bankers say they’ve been scaling back their focus on refinance business and gearing up for a healthy spring purchase market.
“When we looked at our coverage about two years ago, we had 30 mortgage banking officers throughout our entire footprint,” said Simon Tahan, senior vice president of sales and distribution at Webster Bank.
The Waterbury-headquartered now boasts around 80 mortgage bankers throughout its footprint, with a little over half of those concentrated specifically in Connecticut, he said.
“We didn’t want to saturate the market. For those of us who’ve been in this business for a long time, [we] knew eventually the [refinance] market would go. We just wanted to make sure we were strategically aligned and had the right coverage,” Tahan said.
In particular, he said, Webster Bank has focused on increasing its purchase business – and especially its jumbo purchase business – through outreach and educational efforts aimed at first-time homebuyers and referral sources. According to data provided by The Warren Group, in 2012, Webster Bank did 89 jumbo purchase mortgages worth around $96.4 million. Last year, it increased that business to 104 jumbo mortgages totaling $129.7 million.
Rockville Bank is another Connecticut-grown bank that made a strong showing in 2013’s Top Lenders. Last year, it increased its purchase business to 354 loans made for single-family homes and 93 loans made for condos – that’s about $75.9 million and $12.2 million, respectively.
“Right now, we have one of the strongest pipelines we’ve ever had, and that’s unusual, especially given the fact that home buying season really hasn’t kicked off in earnest yet, and we had a horrible winter. We have a very robust pipeline,” said President and CEO William H.W. Crawford IV.
That may be due in part to Rockville’s having hired 28 mortgage loan officers in the past two years.
The Savings Bank of Danbury also edged its way into the Top Lenders in the single-family purchase mortgage category last year, making 211 such loans totaling nearly $64 million. The bank also made 109 condo purchase mortgages totaling about $19 million, a significant increase over the 56 condo purchases worth $11 million it made the previous year.
Executive Vice President Martin Morgado said the bank has placed a strategic focus on ramping up its purchase business. The bank bought Stamford Mortgage Co. two years ago and in mid-2013, it opened up four loan production offices in the greater Hartford area. Savings Bank of Danbury hired three new people and is currently looking for more in the Hartford region, he said.
Inventory Woes
Looking forward, Connecticut bankers say they’re less concerned about the new qualified mortgage and ability-to-repay rules than they are about a possible lack of inventory in the Land of Steady Habits.
“I don’t think there’s a lot of good inventory right now,” Morgado said. “That may just be people holding their homes off the market … We’re not seeing those huge appreciations in values. That may be a function of the foreclosures we have here. Being in a judicial state, our foreclosure process takes an extremely long time.”
Crawford expressed a similar concern: “If I have worries, it’s about the level of inventory out there. I think that will probably be the biggest thing that drives the housing market. As long as you have the inventory levels, there’s going to be demand.”
Email: lalix@thewarrengroup.com
See List of Top Lenders Here
