Wholesale lender seeing growth.

Single-family originations are set to plummet this year by close to 20 percent off 2011 totals, according to a February forecast from the Mortgage Bankers Association (MBA). Yet volume is on track to double in 2012 at United Wholesale Mortgage, Birmingham, Michigan. President Mat Ishbia expects the wholesale lender to produce at least $4 billion in mortgages this year.

Part of that growth is due to larger lenders leaving the wholesale arena. Convent Station, New Jersey-based MetLife Home Loans exited the business in January, joining Charlotte, North Carolina-based Bank of America and New York-based JPMorgan Chase & Co. as notable firms that have left the wholesale mortgage business.

Yet Ishbia is so continent m his Firm's ability to compete that he doesn't like to see other wholesalers leave the market. "The more wholesale lenders there are," he explains, "the better it is for brokers."

United Wholesale is gaining market share with the help of business initiatives designed to assist its brokers. It was an early implementer of the Home Affordable Refinance Program (HARP) 2.0, making the revamped government-sponsored refinancing program available through its online broker portal in December.

Brokers can use United Wholesale s proprietary EASE (Easiest Application System Ever) system to compare and qualify borrowers for up to 1o loans at the time of application, says Ishbia. Kates then can be locked and borrower disclosures generated automatically.

From November 2011 to January 2012, United Wholesale's HARP originations increased 500 percent, Ishbia notes. A March webinar was offered by United Wholesale to educate brokers about the business possibilities offered by HARP

Ishbia adds that some loan servicers are telling their customers it will take up to 120 days to close a HARP refi. Brokers can compete lor those originations, since borrowers are free to work with any lender.

Mortgage industry consultant STRATMOR Group, based in San Francisco, estimates that 2 million refis will result from HARP 2.0. Additionally the streamlined processing offered under the program means that lenders can produce these loans at a lower cost. Economic research firm Moody's Analytics, West Chester, Pennsylvania, adds that closing costs under "the restrung HARP" could be half of what they were in the original government program.

Ready to lend

United Wholesale had an average closing time of 19 days in February, according to Ishbia. Moving production quickly through the system has helped the company avoid warehouse credit line stress as volume has grown. Ishbia notes that United Wholesale is "very well capitalized" and doesn't have a problem obtaining warehouse lines.

Mortgage brokers operate with more efficiency in today's environment than retail lenders do, Ishbia asserts, and are poised to grab market share. "Brokers are coming back," he claims. United Wholesale worked with more new brokers in the three months from December 2011 to February 2012 than it did in all of 2011, adds Ishbia.

Currently United Wholesale has more than 3,0oo approved brokers in 47 states. About half of them originated loans with the firm over the last 60 days.

Loan officers are leaving retail lenders to set up mortgage brokerages, contends Ishbia. Over the last two or three years, he says, originators "ran and hid under the bigger lenders" due to appraisal-reform concerns, as well as new licensing requirements and compensation guidelines.

But today the lending environment "has less uncertainty," Ishbia says. Salespeople who exited the brokerage business to become bank loan officers now are starting new brokerages. "People are going back to the best way to make money and serve borrowers," adds Ishbia, who expects broker market share to climb in coming years.

United Wholesale is an approved seller/servicer with Fannie Mae, Freddie Mac and Ginnie Mae. United has been in business for 26 years, and moved into wholesale lending in 2001.

Conventional, fixed-rate loans are the primary product United is delivering now, says Ishbia. Slightly more than half of originations over the last quarter of 2011 were for purchases, he adds.

The Federal Housing Administration (FHA) is raising its upfront and annual mortgage insurance premiums starting in April. Ishbia believes that will create more demand for conventional loans with private mortgage insurance. United Whole sale could benefit from that change, since its niche is providing excellent service for high-quality brokers working with well-qualified borrowers. "We don't do every loan," he says.

United Wholesale offers fixed-and adjustable-rate jumbo mortgages up to $2.5 million, with loan-to-value (LTV) ratios as high as 80 percent. Ishbia is expecting monthly jumbo original ions to top $50 million starting later this year. In the future. U.S. Department of Agriculture (USDA) loans will be on United Wholesale's menu, as well, for rural properties.

It's all part of a business plan that calls for United Wholesale to double its employee count from the current 525 workers, while growing to $10 billion in annual originations within two or three years. Loan choice, fast turnaround and effective technology once again are proving they can help mortgage brokers thrive.

Howard Schneider is a freelance writer based in Ojai. California. He can be reached at [e-mail].