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First Republic Bank was the dominant force financing Boston’s luxury real estate scene in the last 10 years, and its sudden failure is leaving questions lingering in the air.

First Republic regularly originated between 11 percent and 20 percent of all jumbo residential purchase loans in Suffolk County by dollar volume every year between 2012 and 2022 according to data from The Warren Group, Banker & Tradesman’s publisher.

By numbers of these loans, the picture is similar: First Republic led the pack of mortgage lenders in the hotbed of Massachusetts’ luxury scene with between 10 percent and 20 percent of the market. The bank recorded one of its best years yet in Suffolk County in 2022, originating 234 jumbo residential purchase loans worth $381.9. million compared to its nearest competitor, Arlington-based Leader Bank’s tally of 68 loans worth $29.79 million.

“They are a gem of a group of professionals and bankers that take customer service to a different level,” said MGS Group founder Maggie Gold Seelig. “They really were like a family office. Relationship-centered, personalized, a bespoke approach to banking.”

The clients at Seelig’s luxury residential brokerage “could bank anywhere,” she said, but many chose First Republic for the white-glove treatment they got.

The bank was eager to provide lower rates to its customers, too.

What First Republic Leaves Behind

• Local real estate executives say First Republic filled roles in the industry ecosystem that will be hard to replace.
• JPMorgan Chase wants to keep much of First Republic’s wealth business – but not its low-cost pricing on jumbo loans.
• First Republic’s local impact by the numbers.

“If you talked to mortgage brokers and originators at [First Republic’s] competitors, they’d tell you they couldn’t compete on rate,” said Batterymarch Group broker Andrew Haigney.

Haigney, a buyers-only broker and former investment manager at Merrill Lynch, said he expects First Republic’s failure will mean tighter credit conditions even for Greater Boston’s most well-heeled and eligible borrowers.

“You’re going to have more regulatory oversight – the San Francisco Fed, this is egg on their face so regulators everywhere are now going to be paying attention,” he said. “And internally at these institutions, their risk management people are freaking out because they don’t want to be the [next] people asleep at the switch.”

But even so, said Gibson Sotheby’s International Realty luxury real estate agent Michael Carucci, that likely won’t put additional pressure on the market beyond credit tightening happening at nearly every bank in America.

“What’s helping us is that there’s still not a lot of inventory out there, in comparison to other markets,” he said, adding that in response to lower availability of inexpensive loans, high net worth homebuyers will likely turn away from debt and towards cash.

Seelig said she’ll be watching to see whether JPMorgan Chase retains First Republic staff, since serving luxury clients demands “best-in-class” partners in other parts of a real estate transaction.

But if JPMorgan does retain much of First Republic’s team, Carucci said, it had the potential to assume an even more dominant role in the Boston luxury market.

“It’s really a better bank [post-takeover] – the services are still there, the people are still there, the attention to detail and to the client are still there, and now the financial muscle behind it makes it more compelling,” he said.