Has the housing market hit bottom? The economy is ruled by uncertainty, and lenders are seeing their margins squeezed and the regulatory and legal pressure put upon them increased.
But that doesn’t mean people aren’t buying or refinancing homes.
In fact, a look at Banker & Tradesman’s annual Fast 50 list will tell you not only that demand for home loans is picking up, but that local and regional players are the beneficiaries of a lot of that demand.
The Fast 50 measures the fastest-growing lenders in the state in the first half of the year compared to the same period a year ago. And the results are impressive, especially among local institutions.
For example, Lowell Cooperative Bank wrote 400 purchase loans in the first half of the year. In the same period last year, it wrote 147. That’s a 172 percent increase. And Lowell Bank is not the only bank showing off numbers like that.
First Federal Savings Bank of Boston closed 284 purchase mortgages in the first half compared to four in the first half of last year. Shall we do the math? That’s a 7,000 percent increase.
And the numbers on the refinance side were equally impressive. Leader Bank, after closing 875 refinance loans in the first half of 2011, closed 2,254 in the first half of this year – up more than 157 percent.
The refinance side is also where credit unions found a lot of action in the first half. HarborOne Credit Union closed 1,195 refi loans in the first half, compared to 595 in the same period a year ago.
Industry executives told Banker & Tradesman that a variety of factors from interest rates to impatience is driving loan growth.
It also doesn’t hurt that some of the market’s biggest players, notably Bank of America, have almost completely dropped out of the local scene, creating solid opportunities for local banks, credit unions and mortgage companies to capitalize.
Opportunity Knocks
Still, opportunity doesn’t just happen in a market like this, and customers remain cautious, said James Blake, president and CEO of Brockton-based HarborOne.
“On the refi side, rates are low, and we’ve been promoting pretty heavily the 10-year and the 15-year [products],” Blake told Banker & Tradesman. “Consumers have seen, anecdotally, that housing prices aren’t dropping and people want to lock in a rate while they’re low.”
Blake said overall home loan volume at HarborOne was at $578 million as of July, compared to $240 million for the same period a year ago. About a third of that is in purchase loans.
“It’s nothing we can put our finger on, but it is trending up a bit,” he said.
Richard Bolton, president and CEO of Lowell Bank, said his bank has also seen its loan volume double compared to last year.
“The environment is playing into it,” Bolton told Banker & Tradesman, but like HarborOne, Lowell Bank has also made a big push for more home loan business this year.
Bolton said Lowell Bank now employs more than 100 people in its home lending division, about twice what it had a year ago.
“We’ve really expanded,” Bolton said. “Last year it was first-time homebuyers, but now it’s just people who have made a decision. There are people looking for good deals, and when they find them, they make a move, and these deals aren’t sticking around very long. It’s very competitive.”
Jay Tuli, Leader Bank’s vice president of corporate development, said large increases in lending business is both a sign that banks are doing a good job at establishing relationships, and a test to see if they can maintain them.
“We keep our costs down and our rates low, but on our operations side, we work really hard to close loans in time,” Tuli told Banker & Tradesman. “It sounds crazy, but it’s a huge differentiator right now. It makes a huge difference, and it has helped drive more volume. Realtors trust us, and they are driving more business to Leader Bank.”
Email: mbrown@thewarrengroup.com
