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In a year when low interest rates drove the most residential refinancing in Connecticut since 2013, loan originators throughout the state saw more purchase activity in 2020 than in any year since before the Great Recession.

“Never in my career have I ever seen it where there was a booming refi market and a booming purchase market,” said Jarret Coleman, a mortgage loan officer with U.S. Bank. “Normally, it’s one or the other.”

Even as many households struggled to make mortgage payments, the pandemic spurred others to seek lifestyle changes – from moving out of cities to finding homes with backyards and more space to work at home – creating a competitive purchase market. Add on refinancing, and many loan originators had record levels of activity.

The Warren Group, publisher of The Commercial Record, has compiled from its proprietary loan originators module the top loan originators of calendar year 2020. The originators are ranked by number of loans and loan volume statewide and by the institution with which they are most closely affiliated.

Who came out on top in our 2020 tabulation of Connecticut’s loan originators? See our rankings.

Loan originators across the state processed $35.88 billion in residential mortgages in 2020, up from $19.6 billion in 2019. Purchase activity statewide was $14 billion last year, up nearly 35 percent from $10.4 billion in 2019. Refinancing activity more than doubled, from $9.2 billion in 2019 to $21.79 billion in 2020.

Fairfield County saw purchase volumes increase about 50 percent in 2020 from $4.1 billion in 2019 to $6.2 billion in 2020. Loan originators did nearly 12,400 purchase loans in Fairfield County last year compared to about 10,100 in 2019.

Competitive Market

Coleman said he had a record year in 2020, and his purchase volumes more than tripled in Fairfield County in 2020, according to The Warren Group. But the year had its challenges.

“It was incredibly competitive,” Coleman said. “It was the most competitive market that I’ve seen in my entire career.”

Coleman, who has been in the industry for about 15 years, said he worked nights and weekends to manage the volumes while keeping communication open with his customers. Homebuying is already a challenging experience, Coleman said, and homebuyers concerned about the pandemic were also dealing with rising home values, low inventory and the difficulties of being in a seller’s market.

Sellers often wanted to close quickly, and buyers with mortgages could not compete when sellers received cash offers, Coleman said. Other sellers wanted to waive contingencies that normally protect the buyer if something goes wrong with the transaction, and Coleman said this added stress to the buyer’s experience.

Inventory remains low, Coleman said, but many buyers do not want to sit out a year or two to wait for the market to improve, concerned that home values could continue to rise. Even now, Coleman preapproves mortgages for more buyers than there are homes on the market.

Buyers across the U.S. are experiencing the same challenges, he said.

“I’m licensed nationwide in all 50 states,” Coleman said. “I do loans from California down to Florida up to Maine, and no matter which market I find someone buying in today, every single market is facing the same incredibly competitive scenario where you have far more buyers than inventory.”

Coleman prioritizes the purchase market and in a typical year refinance activity would make up only about 10 percent of his business. Without seeking nonpurchase activity, but with many existing customers looking to refinance, Coleman saw refinances make up more than half his Connecticut volumes, according to The Warren Group.

Those refinance volumes might have been higher, but U.S. Bank at one point in 2020 temporarily increased refinance rates to slow the volume. While the move was disappointing, Coleman said it likely helped him to continue focusing on the purchase market rather than relying too much on business from refinancing.

Homebuyers’ Concerns Changed

Another top loan originator in Fairfield County, Penn Johnson, also focuses on purchase mortgages and did not market for refinance activity in 2020. His company, Stamford Mortgage Co., is a division of the Savings Bank of Danbury, and much of his refinance business came from referrals from the bank.

Johnson founded his mortgage company 25 years ago, initially as an independent firm. He began working with Savings Bank of Danbury about 15 years ago as a wholesaler and became part of the bank 11 years ago after the financial crisis brought challenges to the wholesale industry.

Fairfield County had been a buyer’s market for nearly a decade, as people delayed owning a home and having children, Johnson said. The market had seen more balance in the last couple of years, Johnson said, but then the pandemic spurred a shift favoring sellers.

One area where this shift has played out is North Stamford, which Johnson said used to have excessive inventory in part because people wanted to live closer to the city rather than in a rural area. With the pandemic and the work-from-home trend leading families to migrate out of cities to the type of single-family homes with large backyards in North Stamford, Johnson saw a quick shift in the market in April and May of 2020, a shift that continued to accelerate in the fall and into the winter.

“There’s so many more buyers than inventory right now,” Johnson said. “It’s not uncommon to see 10 or 20 or 30 people looking at a brand-new listing, and it’s selling within the first 24 hours over asking price – that’s fairly common, that’s routine right now.”

This shift has also changed Johnson’s interactions with his customers.

Where homebuyers previously might have been concerned about how to get approved for a mortgage, now they worry about how to get a house, Johnson said. This has changed the conversations Johnson has with his customers, as he now must counsel them about how to position themselves in the market, including how much higher they could afford above their original price range and how comfortable they would be with larger monthly mortgage payments.