Most retail lenders are desperately seeking high producing loan originators to make up for the losses that occurred in 2022. The majority of lenders easily lost half of the volume last year that they originated in 2021, and LOs who have their own databases to tap into are highly sought after.
California-based retail lender JVM Lending plans to drum up business this year — but by doing the exact opposite. The lender runs its business based on a “no-loan-officer” model in which all of its 45 employees are licensed and delegated to a specific role in closing a loan.
After the 2008 mortgage meltdown, JVM let go of all its loan originators and trained its employees to target the jumbo loan market in the San Francisco Bay area instead.
“Back in the 2007-2009 meltdown, we had loan officers with us at that time. We would feed them leads, but they came back to us because they didn’t know how to structure the full document deals,” Jay Voohees, co-founder at JVM Lending, said in an interview with HousingWire.
Under the revamped mode, business development officers build relationships with real estate agents to get leads and client advisors take incoming leads from borrowers. Mortgage analysts are in charge of pre-approving buyers, contract desk employees take in incoming contracts and send it to the underwriting team, and closing specialists process the loans and take over all communication with escrow, real estate agents and buyers to close loans.
“In the Bay area, where we are located, we are primarily in a jumbo market and loans are very complex (…) We still have the expertise niche that comes in a complex environment,” Voohees said.
A lender with $624.6 million in production volume in 2022, JVM saw its origination decline by 51% from the previous year’s $1.28 billion, primarily due to banks’ aggressive price cuts — which led to losing 70% of its jumbo loan business.
“They undercut us by 75 basis points on every single product, and suddenly we started losing borrowers (…) About a month ago, the banks started to push up their rates, probably because their cost of funds increased,” Voheess said.
This year, JVM Lending plans on diversifying their business to closing loans for investment properties rather than being heavily dependent on jumbo loans. The goal for the lender is to have half of its production volume come from investment properties in 2023 — up from the current 10 to 15%.
JVM, which has also had a market presence in Texas since 2017, saw opportunity for investment properties and plans to capitalize on the growing market.
“Last five years, we focused in Texas, we never focused on investment property realtors,” Heejin Kim, co-founder of JVM said. “I thought it was sparse. We are going to pursue the investor niche aggressively, meeting very specific realtors. We have our virtual assistants and our team looking for realtors who focus heavily on investment properties.”
JVM Lending is optimistic about the idea of reaching its sales goal of $1 billion in 2023 based on increased request leads starting from December, which were up 10% compared to the same period in 2021.
“We got a huge upsurge in business in late January, which we haven’t seen in years. We have this week alone one of our best lock-ins, [which] we haven’t had in a long time. I’ve never expected to see it this early, so we’re extremely optimistic right now,” Voohees said.