prime lendingThe Texas-based retail mortgage bank aims to expand its market share by growing within its existing footprint in a margin-thinning environment.
Thank you for reading this post, don't forget to subscribe!The lender hired 100 loan officers in June, taking the total number of LOs to around 800. Licensed in 23 states across the country, PrimeLending has 150 branches, including satellite and primary retail locations.
Jean Lugat, executive vice president of strategic support at PrimeLending, said, “We are dialing up the data, metrics and information that allows us to target communities and markets where we again think we have a competitive advantage and We’re using that strategy across the country.” , said in an interview.
“Companies may be struggling in some way or the other. We will reach out to loan officers in the markets where we have existing retail branches. We’re definitely making it known through both social media and our local retail offices that we want the right loan officers,” Lugat said.
While mergers and acquisitions (M&A) are an option for primelending, executing such deals is a challenging market. Instead, tapping high-volume loan officers in targeted locations has worked for PrimeLending.
“We would love to have loan officers without branches, without physical locations,” Lugat said. “Because we’re trying to backfill in places where we have existing retail opportunities and we have space.”
PrimeLending sees opportunity to grow throughout the Southwest region, and especially in Texas, where the lender is headquartered. The target is to increase its total market share from 0.6% to 1% this year.
Led by President and CEO Steve Thompson, PrimeLending ranked as the 34th largest mortgage lender in Q1 2023 with estimated origination volume of $1.73 billion, a 54% decline from $3.76 billion in Q1 2022 (which was roughly in line with its industry peers). According to the data, the production has decreased by about 15.2% from the $2.04 billion of the fourth quarter of 2022. inside mortgage finance,
The target customer base for PrimeLending are first-time home buyers, as the entire industry is struggling to recover from the lock-in effect. Nearly 92% of US homeowners with mortgages have an interest rate of less than 6%, according to redfin,
While 30-year fixed-rate mortgages are the bread-and-butter product for PrimeLending (accounting for about 95% of origination volume), down payment assistance programs, renovation loans and temporary rate-buying have become popular options for buyers, Lugat famous.
Competition in the industry is even more fierce, Lugat said, citing data that the number of mortgage transactions is expected to drop from 16 million in 2019 to 5 million in 2023. mortgage bankers association (MBA).
The combination of higher loan amounts, cash buyers and a sharp drop in refi volumes adds to the difficulty of today’s environment.
“It is a battle for a very limited number of buyers who are entering the sector. (…) You must present your borrowers in the best possible light to get their contracts accepted, pre-qualify the borrowers and endeavor to get them approved subject to appraisal and any other conditions so that they be in a position to win,” Lugat said.
