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Special Reports
Jumbo and Nonconforming Lending
Engine Lets Originators Find Best Fitting Product
By Brad Finkelstein
The latest lender to list its loan products on SearchMyLoan.com here is Brookview
Financial, Hamden, Conn., a direct rehab lender providing short-term financing for the acquisition and rehabilitation
of residential, non-owner-occupied properties. "In the wake of the subprime and alt-A collapse, there is a
tremendous need for niche, non-owner-occupied and 'rehab' loan products. Many homes have been foreclosed and are
in need of renovation due to the current market conditions," said Salvatore Tomaselli, chief executive of
SearchMyLoan.com. "Our loan search and pricing engine enables originators to identify the 'best fit' for difficult
loans within seconds, thus saving the originator hours of research."
In an interview, Mr. Tomaselli said the founders of the company felt there was
a void in the marketplace because of the lack of a large information aggregator.
SearchMyLoan.com gives users the ability to parse credit as well as allow users
to search a large number of attributes, giving them more accurate results.
Speaking about the market for jumbo and other nonconforming loan products in general,
Mr. Tomaselli commented, "We've gone through a bit of a roller coaster ride."
The company is approaching its third anniversary. During the boom times, it had
a lot of products available for listing. But in the current liquidity crunch, he said, the number of listings has
declined.
New products are not coming on line as quickly as before as lenders are putting
in "more prudent lending criteria," said Mr. Tomaselli, adding they are taking a "cautious approach."
The jumbo market, he said, can be looked at in two segments. The first is lending
to the traditional prudent, high net worth, customer.
But the other developed in the frenzy of the boom, where individuals purchased
properties and the lender paid no attention to the borrower capacity to make repayment. This allowed a high degree
of unqualified people into the market. Now, he said, we are going through a cleansing process.
One of the challenges for SearchMyLoan.com is keeping up with the changes in the
marketplace. The company has a knowledge-processing unit, whose staff is trained to read guidelines and keep things
updated. As a result, SearchMyLoan.com is not dependent upon the lenders to maintain its database. It does daily
guideline reviews for in excess of 50 lenders, he said.
Because products are changing all of the time, the originators get fragmented
data and need a vehicle to quickly identify the right product. That is what SearchMyLoan.com brings to the table.
There are times when originators can get no hits on the database, but even that
shows the value of his service to originators, Mr. Tomaselli said. There are loans that don't make sense for lenders
to do because of borrower issues.
He was at the recent NAMB West conference in Las Vegas. Mr. Tomaselli commented
that it was well attended and that he was happy to see that. It restored his confidence in the mortgage business.
Originators are "getting back to fundamentals," he said.
As for its newest relationship, "Most lenders shy away from loans for distressed
properties, creating a strong need for a lender to offer these types of loans. Unlike many traditional lenders,
Brookview Financial specializes in providing the capital to renovate residential investment properties," said
Paul Carrier, director of business development at Brookview Financial. "Our partnership with SearchMyLoan.com
is beneficial to loan originators because it makes our products more easily accessible, reducing the time and resources
needed to match our loans with the needs of SearchMyLoan.com's subscribers."
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