Thursday, December 12, 2013
Tuesday, December 10, 2013
Independent smaller lenders are more flexible, close faster and provide better service.
Smaller Lenders Take Bigger Bite of Mortgage Market
DAILY REAL ESTATE NEWS | TUESDAY, DECEMBER 10, 2013
Rising mortgage rates and tighter underwriting standards are prompting some borrowers to seek smaller lenders for a mortgage.
Smaller banks and non-bank lenders’ share of the mortgage market is increasing, rising to 60 percent in the third quarter compared to 39 percent in 2009, according to data from Inside Mortgage Finance.
Meanwhile, larger lenders have gradually pulled back on their lending: Only five of the top 20 single-family mortgage originators in 2006 remain active in today’s market, according to Fannie Mae.
"If you're buying a house, our advice is to find a local lender that's reputable," Eric Egenhoefer, president of Waterstone Mortgage, a subsidiary of Milwaukee-based WaterStone Bank, told CNBC. "An independent company in general is more nimble, can get to a closing faster, and provides better service."
Customers may not find the lowest mortgage rates at smaller banks, but some say it's easier to get in touch with a loan officer, and they provide better service.
Even larger lenders are taking note of the shift. Wells Fargo, the nation’s largest lender, has overhauled its Web site to give consumers a “smaller-bank” feel.
"The lending space for Wells Fargo mortgage feels much more like a local community bank than a giant bank with a call center," Franklin Codel, head of Wells Fargo's mortgage production, told CNBC. "Most consumers are looking for a personal relationship with someone who can help them through the process, and not just looking for the lowest rate if it doesn't come with a reasonable amount of service."
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