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Thursday, Oct 6, 2022
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Meeting Needs, New Regulations Keep Mortgage Companies Busy

Businesses on the San Diego Business Journal’s Mortgage Companies list have confidence in their ability to grow amid a mixed climate of low interest rates and increased regulation.

Brad Livingston, president of the No. 2 ranked Residential Wholesale Mortgage Inc. with $462.4 million in loans originated in 2010, said low interest rates contributed to an increase in the number of loans performed by the company, which jumped from 897 in 2009 to 1,133 last year. To accommodate the increased market demand, Livingston said Residential Wholesale Mortgage increased its staffing and introduced technologies that improved its work flow systems and created greater efficiencies.

The San Diego-based company continued on its expansion path this year by opening a government loan center in Clairemont that specializes in Federal Housing Administration and Veterans Affairs housing loans. The strategic hiring and new division help pick up the pace of a more challenging year, Livingston said.

Paying for Compliance

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“Interest rates in the first part of the year are not as aggressive and we’ve had to go through compliance so it’s stymied production,” he said, explaining that the industry was impacted by the Federal Reserve weighing in on loan officer compensation in April and by the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act last year. “The disclosure process makes it expensive. We’re paying for more compliance and, ultimately, the consumer is paying for that too.”

Residential Wholesale Mortgage is a full-service mortgage banking company that offers application processing, underwriting, loan document preparation and funding of both residential and commercial loans of more than four units.

Integrity First Financial Group, ranked No. 3 on the Mortgage Companies list with $350 million in loans originated in 2010, also increased its number of loans, which rose from 612 in 2009 to 933 last year.

Specializing in residential mortgage lending, Integrity First President Alex Barnett said a large factor for its growth was its expansion in six states — Colorado, Massachusetts, Oregon, Pennsylvania, Virginia and Washington — in late 2010.

“Because interest rates were so low for so long we thought people would have already secured financing, so we wanted to expand the scope and range of the people we could reach,” Barnett said.

During the growth period the University Towne Center-based company added 10 staff members, bringing its total number of employees to 31, said Barnett, adding that this year continues to be busy as the company implements its banking strategy of lending out its funds.

“We’re hopeful this year will meet or match last year,” he said. “Last year was a record year for us so we’d be happy just to match it.”

On a positive note, Barnett said the company is just now starting to see a return of jumbo mortgage lending and a return of million-dollar loans in just the past couple of months.

At Liberty Station-based San Diego Funding, ranked No. 4 on the Mortgage Companies list with $190.2 million in loans originated in 2010, the number of loans increased from 531 in 2009 to 601 in 2010.

San Diego Funding President Linnea Arrington attributes the growth to more local loans falling into the categories of their specialties — FHA, VA and Freddie Mac and Fannie Mae.

A Need for Speed

“Because of our experience and efficiency we’re able to approve and close loans much faster than the competition, which is very important when timelines have to be met and with short sales and foreclosures there’s a lot of timelines that have to be met,” said Arrington, whose firm originates and closes residential loans.

To keep up with the growth, Arrington said San Diego Funding added several new employees during the last 12 months, to bring the total number of employees to 20. She says that the company gains clients through referrals and through people researching their record on the Internet.

Although Arrington said business this year is slightly slower than last year due to a reduction in refinancing and increasing interest rates, the loan amounts are increasing due to more mid- and upper-end residential sales occurring.

“A couple of years ago most buyers were first-time buyers of foreclosures and short sales,” she said. “Now we’re seeing clients purchasing up.”

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