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Conventional, FHA Loans Dominate Lenders One Challenge
By Brad Finkelstein
ST. LOUIS - Lenders One Mortgage Corp. here had challenged its members to originate $3 billion in loans in a 30-day period.
The company was more than successful, closing $3.4 million across several product types.
But by product type, the most originated loans were conventional and Federal Housing Administration. This mirrors what observers have been seeing in the overall origination market.
Over 50% of the challenge month's production was conventional mortgages. But FHA made up 42.5% of loans originated during the period. The remaining 5.3% was either jumbo, alt-A or a second mortgage loan. The loans were used for home purchases, refinancings and new construction.
"We were confident that our members could originate (and close) enough loans in a month's time to reach our goal of $3 billion," explained Scott Stern, the chief executive officer of Lenders One. "The purpose of this challenge was to restore faith back into the lending process and reveal the positive aspects that continue to exist in the mortgage industry. Safe, lower cost products are available, as well as solid underwriting practices. The real goal is to create awareness that these services do exist and are completely viable."
The challenge was in reaction to the media reports of unemployment and the mortgage meltdown having a negative effect on consumer confidence.
The company said it was confident that making consumers aware of available loan products and refinancing options was a key to increasing loan performance.
Lenders One has more than 120 mortgage banking companies as members of its alliance. These companies during the challenge originated loans in most, if not all of the 50 states.
"Lenders One reported record growth in both membership and production for the first half of 2008, and we see no signs of these slowing down," Mr. Stern said. "More lenders are recognizing the products and services afforded to our members that enable them to compete with the mortgage giants without changing the way they run their business, ultimately attributing to increased productivity to close more loans."
Lenders One has a goal of reaching 130 members this year.
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