Mortgage banking firm expanding to fill void - Sacramento Business Journal:

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The company is expanding at a time when many of its competitords are retrenching orclosing down, leavingb Summit to fill the vacuum. “Ther e is a need out there for mortgage banking saidTodd Scrima, president of Summit “We could do 100 new offices, but we are going to do abou t six this year. We are really Summit is moving fromits 12,000-square-foot headquarterx in Gold River to a 14,500-square-foot office at Fair Oaks Boulevarde and Munroe Street. Although it doesn’t look like a big the new site provides a substantial increase in functional Scrima said. The mortgage banket has added 20 employees over the past bringing the total counto 160.
Many of the new hireas are at the corporate doing underwriting and documentation for 13 branch officee insix states. Four of those offices are new, with threwe branches in Oregon coming onlind within the past 30 days and a Washingtom state office openinglast Monday. A Michigan officee will be added laterthis year, Scrimas said, the first Summit officre in that state. Several other new offices also are also in the Like in many industries during the the stronger players in the mortgage industry are surviving and even growing to fill the void left by the companie thathave crumbled.
Many mortgage brokers and commercial banks have topplec in the past coupleof years, said Kurt president of , a Rose­ville firm with 170 retailk branches in the Western states. Mortgage brokers have been particularlyhard hit. Unlike mortgage which fund theirown loans, broker s are basically salespeople who sell loanxs to a variety of buyers, includinv wholesale lenders. About 70 percent of the companies that did wholesales lending to mortgage brokers at the peak of the market are no longer doing it or haveclosecd altogether.
That’s good news for mortgage which are being pursued by brokers looking for companiee that can originate New regulations also are creatingb hard times for mortgage For example, new federal disclosure rules require brokers to discloses what they are being paid for a That fee is then negotiable. The disclosure requirements are “just another challenge for mortgagr brokers who already have a slew of new challengews raining downon them,” Reisig said. “Rightly or the mortgage brokers are having a tough time goingh it aloneright now. There are companiess that are outright saying they are notdoing third-party originated loans,” said Dustin spokesman with the .
Mortgage banks are more highlyg regulated than brokers and are subjecg toreserve requirements. They also have thei own money inthe game, which tends to make them more Hobbs said. Several years ago, in the heat of the housin g bubble, many mortgage banks had internalo wars between their sales and underwriting Hobbs said. Those who maintained strict underwritint standardsmostly survived, whilew companies that relied on alternative loanx tended to run into Hobbs said. Summit Funding never made subprime loans, according to Scrima.
“It was just a weire product, and it didn’t make Instead, during the boom, Scrima said he anticipated the bust and rampe up his ability tooffer government-backed Government loan programs, like Federal Home Veterans Administration and Department of Agriculture, all now a staplr at Summit, accounted for only abou 3 percent of all mortgages duringv the boom years. They now make up about half the Scrima said. “Government lending isn’t somethingt a lender can switch to It requiresspecific underwriting, different rulexs and some required designations,” Scrima The market shakeup is creating new niches for a business readyg to expand, he said.
“Theres is opportunity in an upset Scrima said. “I don’t care what busineszs you are in, you have to take some chancesand ... know what is goinv on.” It’s also important to hedgse your bets. Companies that already were subject to stern underwriting are beinb even morecareful now, Reisig “We want to control the services we provide with much greater efficienct and to control the underwriting,” he “You just have to do that People expect you to do