EDWARD F. WALLACE JR.
New England ‘a great market’
The banking industry isn’t the only one being threatened by out-of-state mergers and new competition. The Massachusetts mortgage industry must now prepare to defend its territory, as well.
First Magnus Financial Corp., a top 25 national mortgage bank, has opened its first branch in the Boston area. Historically, the New England region was served from the company’s national headquarters in Tucson, Ariz. First Magnus’ new regional office is in Needham and plans call for account executives to be positioned throughout all six New England states.
While it certainly is not the first out-of-state mortgage lender to set up shop in the Route 128 beltway, First Magnus Financial Corp. is the largest privately held multi-channel mortgage company in the United States.
The company, which lends in all 50 states and had funding in excess of $16.5 billion in 2003, is also a recognized leader in technological development within the mortgage industry. The company is executing a major national expansion into a number of top metropolitan areas across the country, and has planned a sizable increase to its sales force in several other markets.
First Magnus describes itself as a leader in mortgage banking, and was last year’s recipient of the National Association of Mortgage Brokers highest honor as NAMB’s 2003 Affiliate of the Year, providing some steep competition for other firms in the Boston area.
But executives at First Magnus said they are more focused on the business strategy, and less concerned about the competitiveness in the industry.
“We are moving into New England because we’ve had a presence into New England markets but not a physical presence,” said Edward F. Wallace Jr., senior vice president in charge of wholesale lending at First Magnus in Atlanta.
A ‘Proven’ Model
Wallace was hired in December 2003 to “develop the country” for First Magnus and help the company reach beyond its current West Coast and Southern marketplaces.
“[First Magnus] were very dominant in the South and West Coast, and when I came on board, my job was to develop the rest of the country,” said Wallace. “New England has always been a great market and it hasn’t been stable for the last 25 years, but the Boston metropolitan area has been a good solid market as far as quality of loans and types of loans and will allow us to diversity our portfolio so that we are not concentrated in one part of the country. The other reason we moved to New England is that we had an opportunity to bring on some high-quality individuals who have been in the market for a long period of time and have a tremendous reputation and can bring volume into the company.”
New England Area Manager Art Lindberg said he signed on with First Magnus because “they offered the best combination of product, pricing and technology. And they afforded me the opportunity to work with people I know and trust – they are experienced, knowledgeable, loyal and honest professionals who excel as a team serving their brokers. We are all excited at this opportunity to leverage our experience in applying a proven business model within the New England area.”
Lindberg said the company’s operations and underwriting managers have over 20 years of experience in managing large wholesale operations and, over the years, brokers have come to “rely on us to move their loans through the system quickly and efficiently.”
Wallace said First Magnus currently has brokers in Massachusetts, Rhode Island, Connecticut, Vermont and Maine, doing business with the mortgage company, and Wallace said he expects a continued relationship and more profitability with the company moving to the Boston area.
As far as current New England market share, Wallace said First Magnus’ profitability in the region has been consistent, albeit very minimal.
“Our goal is to do around $1.5 [billion] to $2 billion worth of business out of New England,” said Wallace. “That is based on an average loan amount equaling around $175,000 to $180,000 in New England, so if we did $1.5 billion worth of loans at $175,000 a loan, that would be originating around 8,000 loans, and we can do that.”
First Magnus opened its doors in Needham last Wednesday, and Wallace said the company is ready and eager to make waves in the New England mortgage landscape.
“We are considered not a price leader, but we will always be a competitively priced company and what drives our business is the quality service we can provide from a personal and technology standpoint,” said Wallace. “We have one of the best technology systems in the agency that will allow brokers to get their loans through the system faster and that keeps them producing more loans and originating more business. We want to be competitively priced, but our service is what we feel the most pride in, and we look forward to being in Boston.”
