Growth is a great thing. It’s also something that’s difficult to achieve and even more difficult to sustain.
And yet, year-in and year-out, despite awful economic conditions, uncertain political and regulatory climates and any number of financial headwinds, dozens of mortgage lenders set themselves up for phenomenal year-over-year growth.
And we think those companies deserve to be spotlighted. That’s why we compile and publish Banker & Tradesman’s Fast 50 data every year.
We’re in the business of telling stories, and there’s no better or more fundamental story to tell than that of eye-popping growth.
Consider tiny First Federal Savings Bank of Boston. From just one unassuming branch tucked away in Downtown Crossing, First Federal Savings grew from a total of four purchase mortgage loans in the first half of last year to 284 in the first half of 2012.
If you’re doing the math, that’s a 7,000 percent increase. No big deal.
Of course, the compilation is called the Fast 50, and First Federal Savings is just one institution among dozens that exhibited stellar growth in originated refinance or purchase money mortgages – and in some cases, both. We count four institutions, including a number of locally based players, making the top-10 lists for growth in both categories: Guaranteed Rate Inc., First Federal Savings, Leader Bank and Salem Five Cents Mortgage Corp.
What is perhaps most heartening about these lists is the fact that there were no cheap victories, no instances of an institution barely making the list for lack of competition. Not only did these institutions grow, they grew a lot.
We’re aware that historically low interest rates are continuing to drive refinance business through the roof. But an argument can be made that precisely because consumers are so aware of their historic opportunities, competition for refinance business has also never been tougher.
Rates have been at or near historic lows for many months now, and finding new business among the shrinking pool of eligible and willing refi candidates can’t be easy. If a homeowner has refinanced in the past six months or year, it’s very unlikely they’ll be refinancing again any time soon.
Despite that, we show 34 institutions among the top 50 fastest growing refinance lenders that managed to at least double their business year-over-year in the first six months. And in many cases, these companies didn’t stop at doubling their business. They often tripled, quadrupled or quintupled their business.
On the purchase side, half of the fastest growing companies on the Fast 50 list managed to at least double their business year-over-year. And unlike with refis, the purchase market isn’t exactly enjoying an historic resurgence. Yes, the sales market is brighter this year than last year – which is sort of like saying yellow is a brighter color than gray. Of course it is.
But the sales market isn’t twice as good as it was last year – not by a long shot. According to information obtained from The Warren Group, publisher of Banker & Tradesman, the number of single-family home sales in January through June of this year was roughly 24 percent higher than the number of sales for the same period last year. In a perfect world, then, all lenders would ideally be doing on average 24 percent better.
That at least 25 lenders are doing at least 100 percent better is, in this light, all the more astounding.
But there’s a downside to growth – by its nature, it’s a zero sum game. Growth comes at competitors’ expense. For a company to grow, it must succeed in taking business from someone else.
Knowing this, we understand next year’s list may be completely different. The success stories of 2012 may be 2013’s obituaries.
But that’s exciting, too. In growth, there are always stories. And we can’t wait to tell them to you.
