Ryan White: Vast majority of Simmons Bank mortgages are home purchases.
The Springfield mortgage market belongs to familiar faces, but a new name is playing the field alongside traditional lending institutions.
Established in 2008, Fort Mill, S.C.-based lender Movement Mortgage LLC is new to the scene and absorbing business at a rapid pace. Companywide loan volume is up 81 percent to $7.8 billion in 2015, said spokesman Adam O’Daniel. This year, it’s on track to reach $13 billion, and the company has carved out about $2 million in mortgages locally since opening in January.
“Buyers are returning to the market, but we’ve also seen a huge success expanding into new markets,” O’Daniel said, noting the company has 500 offices in 47 states and a goal of capturing one in 10 homebuyer transactions by 2025.
“In 2015, we had one of about every 75,” he said. “This year will be about one in 50.”
With 17 branches in Missouri and 11 of those in St. Louis, Springfield is a recent addition to the expanding footprint. Springfield Branch Manager Chris Krans said the average loan by Movement Mortgage is around $125,000, and all have been for home purchases.
“More people are buying and selling, but there’s a shortage really,” Krans said. “I have people preapproved to buy, but in their eyes there just isn’t a house on the market yet.”
According to Greene County assessor records, plenty of borrowers are finding direct lenders – whether they are longtime private firms like Kansas City-based J.B. Nutter and Co. or New Penn Financial LLC. Out of 788 deeds of trust and mortgages filed in the county during the month of July, nearly 28 percent representing $44 million were from mortgage firms other than banks, credit unions and trusts.
On the traditional lending side, new purchases made up the bulk of Simmons Bank’s mortgages in 2015, said Ryan White, vice president and mortgage manager in Springfield. Loan volumes last year within 50 miles of Springfield were about $80 million, split between 75 percent home purchases and 25 percent refinancing.
“In 2009, you could have flipped that around,” White said, noting the transition to purchases since 2013 has affected overall volume, down about 10 percent from $88.6 million reported on Springfield Business Journal’s 2014 list of the Area’s Largest Mortgage Companies.
“We’re seeing the market and market values starting to improve. We think the inventory is improving as well,” White said, adding Simmons Bank’s new construction loans were up 20 percent in 2015. “So we’re filling that gap. We’re back to the purchasing environment.”
Days away
Equitable Mortgage Corp. also is weighted toward purchase loans, said President Tom Mullen, with the split closer to 60-40 purchases versus refinancing.
“That’s pretty standard from year to year,” Mullen said of the secondary mortgage market wholesale lender. “We’re seeing a lot of millenials as first-time home buyers right now.”
Equitable Mortgage ranked No. 9 on SBJ’s 2016 mortgage company list with loans of $50.5 million, a roughly 20 percent increase from the $42 million in 2014 that Mullen said the company is on pace to repeat this year.
While OakStar Bank and Great Southern Bank took the top two spots, private lenders Flat Branch Home Loans, Gershman Mortgage and DAS Acquisition Co. LLC all posted loan volumes within the $100 million-$110 million range.
Accumulating loans from over 100 community banks and credit unions in Missouri, Arkansas and Kansas, Mullen said Equitable Mortgage is still under the gun to get mortgages processed in a timely fashion. The average turnaround time in the Springfield area for conventional loans is 30 days.
Krans said differentiating Movement Mortgage’s model from other lenders is the 6-7-1 process – referring to the number of hours it takes to underwrite a borrower and days to process a loan, with another day to set up a closing.
He said seven days is the fastest the company can process loans per guidelines from such regulators as the Consumer Financial Protection Bureau.
White said Simmons Bank locally processes, underwrites and closes loans, averaging about 20 days from start to finish on 30-day contracts. However, he argues ASAP turnarounds aren’t always in the best interests of clients.
“You have to put things into a buying and selling perspective; people need time to move out of the house or move in,” White said, adding the vast majority of Simmons Bank’s mortgages are 30-day contracts.
The different models allow each entity to make loans in cases others might not.
Krans said Movement Mortgage works with low-to-moderate incomes up to affluent investors. He can lend in the 580-620 credit score range with no overlays and to borrowers with as high as 50 percent debt-to-income ratio on certain loans.
At Simmons Bank, White gave an example of a borrower seeking a 100 percent U.S. Department of Agriculture rural development loan but having no established credit history. In those instances, the bank often builds a client’s credit by tracking payment history for such items as electric bills, rent and car insurance.
Referral relationships
In a business based on referrals, White said the strength of an institution’s volume relies on loan officers to build a client base.
“People come to a loan officer because they know them,” White added. “We’re all in the same field fighting for the same business, so it’s about hiring the right people with the right connections.”
Mullen said Equitable Mortgage wholesale managers serve the same function, and being established in the three-state area since 1996 helped it weather the storm that shuttered many independent brokers following the 2008 recession.
“We had 10 to 15 years behind us when it hit, so we had a good idea of what we were doing,” Mullen said. “Now with the market coming back, there are more companies opening up again.”
A number of agencies established in the past 10 years are doing business in the Springfield market, include Carrington Mortgage Services LLC and Missouri Mortgage Services, both established in 2007. Similar to more familiar names like Quicken Loans Inc., they’re able to capture part of the Springfield market online, without the need for a brick-and-mortar presence.
Movement Mortgage plans to add five loan officers to the Springfield branch by mid-2017, Krans said, with the intent of casting a wider net for real estate agent relationships.
“It’s new to the Realtors in Springfield. Some of the smaller ones don’t understand the processes and don’t know about us yet,” he said. “The client is the Realtor, from top to bottom. We want to make sure we have a referable transaction.”
