On June 1, the Arizona-headquartered retail lender Amerifirst Financial Inc. relaunched its forward mortgage origination. The business closed in December 2022 after rising mortgage rates wreaked havoc on the housing industry.
Thank you for reading this post, don't forget to subscribe!out of 400 employees scooped by american pacific mortgage (APM) At the end of last year, about 20 LOs have returned to AmeriFirst Financial.
Eric Bowlby, CEO of AmeriFirst Financial, said housing wire That around 50 operational employees have joined the company from other lenders, including those who returned from APM.
“I think it was always a possibility,” said Bill Lowman, APM’s vice chairman. “Not all of them were a long-term fit. I don’t think it was something that was completely unexpected, and probably, in the long run, worked out very well.”
Bowlby said AmeriFirst never closed the business. Lender maintains its servicing portfolio, servicing approximately $1 billion fannie mae, Freddie Mac And Ginnie Mae Loan.
In its origination business, AmeriFirst houses its business purpose lending (BPL), offering four products including debt-service coverage ratio (DSCR) loans, bridge financing, investor construction loans and residential transition loans (RTL). According to the firm, its BPL business generates a volume of around $30 million every month.
Now that it’s getting back into the forward mortgage origination business, AmeriFirst plans to focus on providing competitive rates to buyers by cutting branch and regional margins, which led to higher fees for buyers.
“Most companies that have branches build their models at around 275 to 300 basis points at the branch. Then you have your corporate margin and you have your regional margin,” Bowlby said.
“How does the corporate make any money when your branch’s margin is taking everything to begin with? Because now what they have to do is they have to go in and charge at the points to meet their loan,” he said.
AmeriFirst will keep physical branches in 20 states, but under a new corporate model, no branch manager will dominate the output of the loan officers it manages.
By getting rid of regional and branch margins, AmeriFirst says it will be able to eliminate about 100 to 125 bps built in rates, making rates downright competitive compared to mortgage brokers.
In return, AmeriFirst Financial’s loan officers will be able to provide “faster rates” and won’t be undercut by other competing lenders, Bowlby said.
“In today’s market, as soon as you pull credit, there are 30 companies buying trigger leads calling and shorting you (…). If you have an additional 100 to 125 basis points of margin, it is easy for them to undercut you,” he said.
Another priority for AmeriFirst Financial is for loan officers to target potential homebuyers before they’re even on the market.
In line with AmeriFirst’s new motto, “broker pricing and banker service,” Bowlby said he will train loan originators to persuade renters to buy and real estate agents to bring the deal together.
“If you, as a promoter, want to stand out today, the way to do that is to have your own book of business that you can hand out to agents,” Bowlby said.
Of the 44 states licensed, Arizona accounts for 50% of AmeriFirst’s production. Other states that bring in large quantities include California, Colorado, Texas, and Nevada.
Bowlby said they receive 150 to 165 bps per loan, depending on the lender’s LO sector. He is looking to hire more loan officers who love the world of banking but don’t want to go the wholesale channel.
Going forward, the sweet spot for AmeriFirst is closing $100 million in origination volume a month. AmeriFirst to close $2.5 billion in loan originations in 2022, according to mortgage tech platform modex,
“If you’re at $100 million, you’re relevant. You can put things in their place (…) When we started doing $500 million a month, I didn’t even know all the people who worked for me . I don’t like doing things like that. We want to reach that number, but at the same time, make sure it lines up with all the cultural ideas that people have about knowing, helping and being a part of their lives We have,” Bowlby said.
