The Fast 50, compiled from data collected by The Warren Group, publisher of Banker & Tradesman, reveals the 50 fastest-growing lenders in Massachusetts.
To earn its spot in Banker & Tradesman’s annual Fast 50 rankings, Newburyport Bank nearly quintupled its loan volume, the most of any bank in the rankings.
Newburyport was fifth in residential loan volume growth statewide: 376 percent growth year-over-year when analyzing the first halves of 2023 and 2024. The bank’s residential loan volume increased from $25.61 million in the first six months of 2023 to $121.83 million in the first six months of 2024 according to data compiled by The Warren Group, publisher of Banker & Tradesman.
Most of that – $94.69 million in total – was in the form of purchase loans, the data shows.
Joanna Buccieri, senior vice president and director of residential and commercial lending, said the bank sought to grow its mortgage lending business a bit over a decade ago.
“When I came on with the bank in 2012, the bank made a decision to sell long-term fixed-rate mortgages, similar to many other banks out there,” she said. “That decision has varied over the years, just based on our balance sheet appetite. Whether loans have been sold, either servicing-released or servicing-retained, which is where we opt currently if we were to sell mortgages.”
John Burcke, president of Newburyport Bank, credited the limited inventory growth the region’s residential real estate market and the work of the bank’s residential lending team for the growth in loan volume.
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“I think for us, the first half of last year was really the trough of mortgage demand. We really didn’t see a lot of application activity,” he said. “I think coming into this year, couple of things have happened. One, I think inventory has certainly improved in the geography that we serve, and that’s led to more opportunities for us, and I think [for] a lot of our competitors as well.”
The bank’s construction lending business has also been a big factor, Burcke said. Newburyport ranked 11th in Banker & Tradesman’s Fast 50 rankings after growing its commercial loan volume 240 percent. The bank’s commercial loan volume jumped from $9.58 million in the first half of 2023 to $32.59 million in the first half of 2024.
“Coupled with a pretty significant increase in the number of commercial residential construction projects that we’re financing and opportunities that, you know, our residential lending team has been able to capture out of those, I think those two things have kind of driven the increase in volume year over year,” Burcke said.
New Products for Affordability
But Newburyport Bank also has begun offering products to meet prospective homebuyers’ needs. While interest rates are starting to drop, they remain high. Also, a persistent lack of inventory has only added fuel to the fire of increasingly high home prices that have burned up many Bay Staters’ dreams of homeownership. Together, the two forces are keeping home prices and monthly mortgage payments out of reach for many.
Newburyport participates in the Federal Home Loan Bank of Boston’s Equity Builder Program. The Equity Builder Program offers grants to help first-time buyers – earning up to 80 percent of the area median income – with down payment, closing cost and home rehabilitation assistance, plus homebuyer education and counseling.
From 2003 through 2023, 212 member institutions of the Federal Loan Bank of Boston have participated in the Equity Builder Program making up just over 4,600 homebuyers throughout New England.
The bank also offers a bridge loan and a 40-year mortgage product for first-time home buyers that has low down-payment and mortgage insurance requirements. Few lenders offer 40-year mortgages and most of them are credit unions and local banks.
These institutions sometimes mitigate the extra risk from the longer term and the need to hold such loans in portfolio by offering 40-year mortgages with adjustable rates, meaning that the monthly payments can go up over time.
“I think we all have a responsibility to get borrowers into houses and make housing a realistic option for folks,” Buccieri said.
“We’re really passionate about affordable housing,” Burcke added. “I think the 40-year program is a great example of us trying to be creative in terms of creating a product that is likely going to make a huge difference for people in the low- to moderate-income space, whether they’re going to be able to qualify for that mortgage or not.”
40-Year Loans for Some
While some buyers and sellers are clearly waiting for interest rates to fall further – as Banker & Tradesman reported last week, listings data shows Greater Boston homeowners weren’t moved by mortgage rates’ downward slide in July – others may be opting for the 40-year mortgage products available from multiple mortgage lenders.
“As rare as they are, the existence of 40-year loans speaks to the affordability challenges that would-be homeowners face,” said Holden Lewis, a mortgages expert at NerdWallet. “There aren’t many solutions besides waiting for interest rates to fall. Meanwhile, a few desperate homebuyers will seek 40-year mortgages in the hope that the lower payments will allow them to buy now and refinance later into a 30-year loan.”
While 40-year mortgages might help some, they can hurt borrowers in the long run, some experts warn, particularly through the higher interest costs due to the additional 10 years compared to a traditional 30-year mortgage.
Sam Minton
“A 40-year mortgage brings lower payments, but higher interest costs over the long life of the loan,” Bankrate Senior Economic Analyst Mark Hamrick said. “While this unusual home loan product addresses affordability on a monthly basis, it comes with a number of tradeoffs including the additional time required to pay it off and a potentially higher rate of interest.”
As interest rates begin to fall, there will be more room for growth. Prospective homebuyers will be able to receive better mortgage rates and thus will be able to access more funding.
But Burcke also expects the refinance market to have a boom as homeowners who purchased homes at a higher rate seek some relief. According to an Optimal Blue report on July mortgage application activity, national refinance activity has hit a high not seen since September of 2022.
“I think there are a number of people who have purchased homes with much higher interest rates over the course of the last couple years,” he said. “I think that might create some type of mini-refinance boom and we’re certainly going to be positioned to take advantage of that […] Our plan is to continue to be competitive in this space.”
