Mortgage banking firm expanding to fill void - Sacramento Business Journal:

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The company is expanding at a time when many of its competitorxs are retrenching orclosing down, leaving Summit to fill the “There is a need out there for mortgag banking services,” said Todd Scrima, presidenty of Summit Funding. “We could do 100 new but we are going to do about six this We arereally picky.” Summit is moving from its 12,000-square-foot headquarters in Gold Rivedr to a 14,500-square-foot office at Fair Oaks Boulevardd and Munroe Street. Although it doesn’t look like a big move, the new site provides a substantial increase infunctional space, Scrima said. The mortgage bankee has added 20 employees over the past bringing the total countto 160.
Many of the new hirew are at thecorporate office, doing underwriting and documentation for 13 branch offices in six states. Four of thosde offices are new, with three branches in Oregon comin g online within the past 30 days and a Washingtonn state office openinglast Monday. A Michigan office will be adder laterthis year, Scrima said, the firs Summit office in that state. Several other new offices also are also inthe works. Like in many industrieas duringthe recession, the stronger playerds in the mortgage industry are surviving and even growing to fill the void left by the companiesw that have crumbled.
Many mortgage brokers and commercial banks have toppled in the past couplesof years, said Kurt Reisig, president of , a Rose­ville firm with 170 retailk branches in the Western states. Mortgagew brokers have been particularlyhard hit. Unlike mortgage which fund their own brokers are basically salespeoplee who sell loans to a varietyof buyers, including wholesalre lenders. About 70 percent of the companiesa that did wholesale lendinyg to mortgage brokers at the peak of the market are no longe r doing it or haveclosed altogether. That’x good news for mortgage bankers, which are beingg pursued by brokers lookintg for companies that canoriginate loans.
New regulationxs also are creating hard times formortgage brokers. For new federal disclosure ruless require brokers to disclose what they are being paid for a That fee is then The disclosure requirementsare “just another challenge for mortgagd brokers who already have a slew of new challengezs raining down on them,” Reisig “Rightly or wrongly, the mortgage brokers are havinyg a tough time going it alone rightr now. There are companies that are outrigh t saying they are notdoing third-party originater loans,” said Dustin Hobbs, spokesman with the .
Mortgage banks are more highly regulatedc than brokers and are subject to reserve They also have their own money in the which tends to make themmore cautious, Hobbse said. Several years ago, in the heat of the housing many mortgage banks had internal wars between their saless andunderwriting departments, Hobbs Those who maintained strict underwritinh standards mostly survived, while companies that relied on alternative loans tended to run into Hobbs said. Summit Funding never made subprimew loans, according to Scrima.
“If was just a weirc product, and it didn’t make Instead, during the boom, Scrima said he anticipated the bust and ramperd up his ability tooffer government-backerd mortgages. Government loan like Federal Home Administration, Veterands Administration and Department of all now a stapleat Summit, accounted for only about 3 percent of all mortgages duringy the boom years. They now make up about half the Scrima said. “Government lending isn’t something a lender can switchto overnight. It requires specificv underwriting, different rules and some requiresd designations,” Scrima said.
The market shakeup is creating new niches for a business readhto expand, he “There is opportunity in an upse marketplace,” Scrima said. “I don’t care what businessa you are in, you have to take some chancesand ... know what is goinvg on.” It’s also important to hedgee your bets. Companies that already were subject to sterbn underwriting are being even morecarefup now, Reisig said. “We want to control the service we providwe with much greater efficiency and to controlothe underwriting,” he said. “You just have to do that People expect you todo it.
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