1st Metropolitan Mortgage Increases Origination Volume with FHA Loans.

Adaptability Key to Broker's Success

CHARLOTTE, N.C. -- With the shifts in the mortgage market, 1st Metropolitan Mortgage has adjusted its strategy and adapted dramatically to the available products in the marketplace, increasing its FHA production eleven fold over the last year.

"Right now we are experiencing a wave of positive occurrences in our industry, which has certainly been subject to a year long succession of negative issues," said Daniel Jacobs, CEO of 1st Metropolitan Mortgage. "While the housing industry is still not thriving in most markets, rates are very favorable, refinance activity is up, and the economic stimulus package has the opportunity, in certain markets, to inject a desperately needed shot of additional liquidity into the market."

A strong focus on adapting to the currently available products has caused 1st Metropolitan to move to an increasingly FHA oriented origination strategy. In March of 2006 3 percent of 1st Metropolitan Mortgage's loan originations were FHA. This March FHA originations accounted for an astounding 33 percent of originations.

And to ensure that 1st Metropolitan originators are properly equipped to handle FHA loans, the company requires approved training classes be taken to further each branch manager's knowledge on the specifics of the program so they can work with potential borrowers and conduct ongoing LO training within the branch.

"As good industry stewards, our originators have to prove they have the experience we require to do FHA loans, or they must take an approved class to improve their knowledge of FHA programs," Jacobs said. "This is a time when FHA loans could easily become 50 percent of our business, and we want to be certain that all of our originators are prepared."

While loan limit increases for both FHA and the GSEs are more limited, are priced a bit higher and have more underwriting restrictions than first expected, they will help create a stop-gap in certain of the hardest hit housing markets until the economy shifts and originations recover.

"I think the market fundamentals, which include the overall strength in the housing market and the appetite among institutional investors to loosen and expand the credit markets, will not improve in great proportions until at least the end of 2008, and more likely that improvement will be seen in the first half of 2009," Jacobs said. "So, to see interest rates and even certain area's loan limits, particularly with FHA, improving, we should receive a boost in business irrespective of the overall housing market improving. We have a good opportunity for the short-term conditions - particularly with the Federal Reserve Chairman Ben Bernanke's foreshadowing of continued short term rate reductions - to create a bridge until the fundamentals are there for a sustained healthy market for mortgage originators. While mortgage rates have been largely unaffected by these short term rate cuts the public regains interest in reassessing their mortgage each time the media reports any rates have dropped."

About 1st Metropolitan Mortgage

1st Metropolitan Mortgage, headquartered in Charlotte, N.C., is a national mortgage brokerage, is licensed in 50 states with approximately 260 branches nationwide. These MetroBranches are able to leverage 25 years of experience in the mortgage industry and economies of scale. This allows 1st Metropolitan to offer not only a broad range of loan products through its 150 lenders, but also the newest and most innovative loan products geared toward true financing solutions customized to each borrower's individual needs.