Leverage non-delegated channels to grow your business
HousingWire recently met with AmeriHome COO and Managing Director John Hedlund to discuss key growth opportunities in the non-delegated channel that lenders may be missing out on.
HousingWire: What are the main growth opportunities that lenders may be missing out on and how can leveraging the non-delegated channel help lenders grow?
John Hedlund: Non-delegated loans can serve many purposes for different types of lenders. For some community banks and credit unions, taking advantage of the non-delegated underwriting option may simply help them expand their capacity and act as a kind of back office. And because non-delegated underwriting typically relieves the lender of underwriting / credit risk, these institutions can serve a broader base of their community.
For mortgage brokers looking to take the leap into mortgage banking, non-delegated loans are the perfect way to create the resume they need on their journey to a fully delegated and approved seller and repairer. agency. As long as they can meet the financial and licensing requirements of the non-delegated correspondent investor, that broker can be the lender, giving him the ability to control his own destiny at the level of the loan, losing the obligation to disclose the discounts on top prices, expand their product line and become a more powerful recruiting machine.
For established mortgage bankers of all shapes and sizes, including community banks, credit unions, and emerging bankers, non-delegated lending can quickly expand lenders’ access to products they might not be familiar with. comfortable taking credit risk. In addition to agency high specialty / LTV products, lenders may have access to non-agency jumbo and non-QM products and be the lender, not a broker.
HW: What are the risks and benefits of non-delegated underwriting?
JH: Although exempt from credit risk, the non-delegated lender still bears the risk of compliance issues and misrepresentation. Different correspondent investors all have different views on this, which is why legal counsel should be consulted when considering MLPAs and seller guides. As with growing any new business, there are risks – but there are also rewards in the form of more opportunities for advantageous pricing, access to loan products, and the ability to be known. as a lender.
One of the main advantages is that much of the additional expense of becoming the lender can be kept as a variable cost – by using an outsourced provider for the execution of their closing documents and financing, lenders can continue to come from their existing staff initially. Once they become familiar with the responsibilities and requirements that correspondent investors expect, they can take on more of these tasks internally.
HW: AmeriHome launched its non-delegate correspondent channel in January 2019. What has the last two years been like in this area?
JH: We have taken a slow, methodical and determined approach to non-delegated affairs. The market has obviously been a bit of a roller coaster and has actually helped us build our resilience and strength along the way. As the third largest correspondent lender in the country for delegated affairs, we have the scale, sophistication and support of a large organization to draw upon for resources, which has been instrumental in the growth of our non-delegated business.
That said, non-delegated customers really don’t care that we’re a big delegate buyer and many of our prospects have never heard of AmeriHome before, so we’ve stepped up our marketing game and proven our value every day. on each loan. We had great success last year and have built a solid foundation for our future growth.