Most retail lenders are desperately looking for high production loan originators to make up for the losses that occurred in 2022. Most lenders easily lost half the volume last year that they originated in 2021, and LOs that have their own bases data to tap into are highly sought after
California based retail lender JVM loan he plans to boost business this year, but by doing the exact opposite. The lender runs its business based on a “loan officer” model in which all of its 45 employees are licensed and delegated a specific role in closing a loan.
After the 2008 mortgage crash, JVM laid off all of its loan originators and retrained its employees to target the jumbo loan market in the San Francisco Bay Area.
“In the 2007-2009 crash, we had loan officers with us at the time. We were sending them leads, but they came back to us because they didn’t know how to structure full document deals,” said Jay Voohees, co-founder of JVM Lending, in an interview with housingwire.
Under the revamped mode, business development officers build relationships with real estate agents to source leads and client advisors take incoming leads from borrowers. Mortgage analysts handle buyer pre-approval, contract desk clerks take incoming contracts and route them to the underwriting team, and closing specialists process loans and handle all communication with escrow, real estate agents and buyers to close the loans.
“In the Bay area, where we’re located, we’re primarily in a giant market and the lending is very complex… We still have the niche expertise that comes up in a complex environment,” Voohees said.
A lender with a production volume of $624.6 million in 2022, JVM experienced a 51% decrease in its origination from $1.28 billion a year earlier, mainly due to aggressive price cuts by banks, which which led to losing 70% of their jumbo loan business.
“They cut us 75 basis points on each product and suddenly we started losing borrowers… About a month ago, banks started raising their rates, probably because the cost of funds went up,” Voheess said.
This year, JVM Lending plans to diversify its business to close loans for investment properties instead of relying heavily on jumbo loans. The lender’s goal is for half of its production volume to come from investment properties by 2023, up from 10% to 15% today.
JVM, which has also had a presence in the Texas market since 2017, saw an opportunity for investment properties and plans to capitalize on the growing market.
“The last five years, we focused on Texas, we never focused on investment property realtors,” said Heejin Kim, co-founder of JVM. “I thought it was low. We will aggressively pursue niche investors, meeting with very specific real estate agents. We have our virtual assistants and our team looking for real estate agents that are heavily focused on investment properties.”
JVM Lending is bullish on the idea of reaching its $1 billion sales target in 2023 based on increased requests from leads starting in December, which were up 10% compared to the same period in 2021.
“We had a huge increase in business at the end of January that we hadn’t seen in years. This week alone we have one of our best running of the bulls, [which] we haven’t had in a long time. I never expected to see it this soon, so we are extremely optimistic at this point,” Voohees said.
