While the refinance boom might not reach the same levels this year that the mortgage industry saw in 2020, near-rock-bottom interest rates have continued to drive residential mortgage activity in 2021, giving lenders opportunities to work with homeowners who had yet to take advantage of the rates or who refinanced again to further reduce monthly expenses.
Some of the fastest-growing residential lenders in Massachusetts this year have been national online lenders that have taken advantage of these opportunities.
“COVID has impacted the entire country, and the government has responded by supporting the mortgage sector and really just supporting the economy overall by dropping interest rates,” said Joe Bilko, chief revenue officer at AmeriSave Mortgage Corp. “That’s created enormous opportunity for customers to be able to lower their monthly payment and take advantage of the savings, and so AmeriSave was really just keenly positioned, given our evolution, to really take advantage of that opportunity.”
Leaders at lenders like AmeriSave and Zillow Home Loans expect the opportunities they have found in Massachusetts this year point to their long-term presence in the state’s mortgage industry.
Zillow’s ‘One-Stop’ Shop
The Fast 50, compiled from data collected by The Warren Group, publisher of Banker & Tradesman, reveals the 50 fastest-growing lenders in Massachusetts for the first six months of the year, compared to the same period a year ago.
Massachusetts had nearly 185,000 residential mortgages from January through June of 2021 for $74.7 billion. Lenders processed about 41,500 purchase loans and almost 144,000 refinances during the first six months of 2021.
Who are the fastest-growing residential and commercial lenders in Massachusetts this year? Check our rankings.
After doing just 19 residential mortgages in Massachusetts in the first six months of 2020, Zillow Home Loans increased originations by more than 1,100 percent this year, processing 239 loans between January and July. Volumes increased more than 1,400 percent to $88.1 million in the first six months of 2021. About 95 percent of Zillow Home Loans’ activity in 2021 involved refinances.
Known primarily for its real estate listings portal, Zillow did not have a lending arm until it acquired Mortgage Lenders of America in late 2018 and then launched Zillow Home Loans in 2019.
Zillow is now evolving from its familiar search-and-find platform to “a one-stop-shop transactional experience,” Lauren Zitter, Zillow Home Loans’ vice president of administration, said in an email to Banker & Tradesman.
Zillow wants to make the real estate transaction “as painless as possible for consumers,” she added, noting that the online platform offers tools and resources to help both homeowners looking to refinance and prospective homebuyers looking for a mortgage and a real estate agent.
To raise awareness with consumers about its loan products, the company has used social media as well as online and broadcast advertising.
The company began to build up Zillow Home Loans last year, Zitter said, and focused on hiring lending officers, loan processors and underwriters heading into this year. Zillow Home Loans offers conventional, FHA and VA loans, and plans to expand into jumbo loans by the end of 2021.
“As customers continue to leverage Zillow for their home search, Zillow Home Loans fulfills the need when it comes to securing financing, and streamlines the home shopping experience,” Zitter said.
National lenders used substantial marketing campaigns to get in front of homeowners looking to refinance their homes amid continued low interest rates.
Plugged Into Refi Boom
While Atlanta-based AmeriSave Mortgage Corp. has been around since 2002, the national lender has experienced a period of growth over the last three years, said Bilko, the company’s chief revenue officer.
AmeriSave processed 3,070 mortgage loans in Massachusetts during the first six months of 2021, according to The Warren Group, a 347 percent increase from the same period in 2020. The lender did $1 billion in residential lending in the state between January and June compared to $212 million in the first six months of 2020.
Bilko said about 98 percent of AmeriSave’s volumes nationally in 2020 involved refinance activity.
“We focused our efforts on customers that had an immediate payment savings,” Bilko said. “That opportunity presents the customers with an immediate benefit.”
The company saw its share of purchase activity increase in 2021, peaking in July at 14 percent, Bilko said. Between January and June of this year, AmeriSave did 98 purchase loans in Massachusetts after processing only seven in the first six months of 2020.
Bilko said AmeriSave’s online lending platform, which includes access to licensed loan officers, has helped drive the company’s growth. The company began developing a proprietary online lending platform in 2016 and fully deployed it in 2020.
Name Recognition Campaign
Bilko said the company has two types of customers: those who already know the AmeriSave name and others who arrive through an affiliated partner, such as LendingTree, where AmeriSave is ranked as a top lender.
Diane McLaughlin
To increase its name recognition, AmeriSave launched an advertising campaign in Massachusetts and elsewhere at the end of 2020, that included ads on television, radio, digital videos, digital displays and social media. Bilko said the campaign was a success, driving an increase in customers, including in Massachusetts.
“We’ve never really focused to the extent that we have of really putting AmeriSave into the forefront of consumers’ minds,” Bilko said. “This is the next generation for us: It’s building the AmeriSave brand and introducing the AmeriSave brand to customers who haven’t yet entered the market.”
Like Zillow Home Loans, AmeriSave primarily offers loans that qualify for backing from a government agency, though it does do some jumbo loans. The company has also started participating in the new programs to help reach more low-income borrowers, including Fannie Mae’s RefiNow.
“Given the trajectory, I don’t see any reason why [our business in] Massachusetts can’t continue to grow year-over-year-over-year, especially given the purchase-centric market that we think that the market is going to move into in 2022, 2023 and beyond,” he said.
