With mortgage interest rates at historic lows, loan originators in 2019 experienced a months-long refinancing boom that has continued amid the coronavirus crisis.
“It was my best year in origination so far – up until this year – mainly because rates fell and refinances became a big opportunity for myself, and I think everyone in this area,” said Jarret Coleman, a mortgage loan officer with U.S. Bank in Greenwich.
Even with refinances driving originations, some loan officers see purchase activity as key to their success.
The Warren Group, publisher of The Commercial Record, has compiled from its proprietary loan originators module the top loan originators of calendar year 2019. The originators are ranked by number of loans and loan volume statewide and by the institution with which they are most closely affiliated.
Loan originators across the state processed $19.65 billion in residential mortgages in 2019, up from $15.4 billion in 2018. Purchase activity statewide was $9.36 billion last year compared to $9 billion in 2018. Refinancing activity increased from $6.43 billion in 2018 to $10.3 billion in 2019.
Maintaining Relationships
Connecticut’s top loan originator for banks based on volume, Coleman said 2019 started off slowly, picking up later in the year when rates started falling.
Working in lower Fairfield County, Coleman typically focuses on the purchase market. He said his purchase activity was stable in 2019, with no upward or downward trends compared to 2018.
His success in the purchase market, Coleman said, is based on a daily regimen of communicating with contacts in the real estate industry, following up on new leads and trying to expand his business.
Who were Connecticut’s top loan originators in 2019? See the full rankings to find out.
Finding refinance business in 2019 did not require a strategy. Homeowners, especially those who had taken out mortgages in 2018 and the first half of 2019, Coleman said, knew that rates were falling and wanted to refinance, leading to a significant increase in volume.
“It’s not a matter of where to get the business,” he said. “It’s a matter of how to process and close the business that you’re getting. It’s just such an odd time that we’re in.”
Refi Volume Created Challenges
Coleman said he appreciated helping people lower their rates, but the volume created challenges for his daily regimen.
“Because I have so much refinance volume that’s at my door, it’s tough for me to keep that same level of communication open with the Realtor relationships that I have,” Coleman said. “So, when that happens, other people can swoop in and steal them from me.”
Coleman recently experienced that possibility. A real estate agent he has known for 15 years used to name Coleman as her top recommendation to homebuyers. After not contacting her recently, Coleman learned from a prospective client that she had added another loan originator to her top recommendations. While the news stung, it showed why he needed to be diligent about maintaining his relationships.
Purchase activity could pick up again soon, Coleman said, and he wants to be prepared. He expects interest rates to remain low but not low enough to trigger another refinancing boom. Eventually, fewer people will remain who can benefit from refinancing activity.
Though sellers have been holding off listing their homes, Coleman said, he has seen the coronavirus pandemic drive people out of New York City into Fairfield County, a less costly option compared to Westchester County. Coleman said the purchase volumes in his region could rebound in the second half of the year.
Refinancing to Reach Goals
On the other side of the state, another top loan originator who typically focuses on purchase activity used the refinance boom to help clients achieve their goals.
Based in New London, Keith Turner with Homestead Funding Corp. was the top loan originator for Connecticut mortgage companies based on the number of loans originated.
Turner had a 50 percent increase in the number of loans he originated in 2019 compared to the prior year. The number of refinances doubled from 2018.
As mortgage rates approached historic lows, Turner reached out to existing clients to talk about whether they should refinance. Some had purchased their home less than a year earlier.
He looked at strategies for each client, Turner said, including reducing monthly payments to increase cash flow, maintaining the same monthly payment with the goal of paying off the mortgage sooner and doing a cash-out refinance to pay off credit card debt with high interest rates, benefiting instead from low mortgage rates.
“For me it’s about helping them accomplish what they want to accomplish,” Turner said. “I think with any sort of business, you’re helping somebody try to do something that they want to do, not necessarily what you want to do.”
Technology Aided Process
While his outreach started the process, Turner said Homestead’s paperless environment and technology helped Homestead make refinancing easier for customers.
“There’s enough business in the sandbox for us all to play well, but it has allowed us to shine a little bit better,” Turner said. “Companies that have scalability – they’ve been able to weather the storm a little bit better.”
As refinancing continued during the pandemic, Turner credited Homestead’s technology team with setting up staff up to work from home. The operations team, he said, kept the process moving.
“We have a fantastic operations side of things,” Turner said. “The underwriters, processors, closers – they’ve really been the backbone, the unsung hero.”
Turner’s region includes the casinos, giant defense contractor Electric Boat Co. and the Coast Guard Academy, and he expects purchase activity to begin soon. As the economy starts to open up, he has been working on prequalifications with prospective homebuyers to prepare them to start house hunting.
