This year’s silver anniversary edition of the Top Producers survey reflects the tougher environment the mortgage industry faced in 2022 — both in terms of dollar volume originated and number of participants.
What the results did show was that successful originators can thrive in any environment.
For the two prior surveys, an originator that produced over $1 billion headed up the list. Last year’s No. 2 did $659 million.
The best of the best in this year’s survey, Shant Banosian of Guaranteed Rate came close to that billion dollar threshold at over $925 million. Mark Cohen of Cohen Financial Group was next at $751 million.
The No. 3 originator, Michael Rodriguez of Platinum Capital Mortgage — that No. 2 originator in the 2022 Top Producers — did slightly more at over $690 million.
Experience is key, our survey data found. The mean number of years in the mortgage business for survey participants was 18.07 years. The mean amount of time they have been with their current company is 7.49 years.
But the falloff is seen at the bottom of the list. This year it is around $20 million in production, whereas one year ago it was above $54 million.
Many originators, flush with business in a record production year, were happy to share their results for the 2022 edition.
But overall mortgage industry volume fell to $2.245 trillion last year from $4.436 trillion in 2021, the Mortgage Bankers Association reports. The first quarter was the best in 2022 at $689 billion. That fell to $398 million in the fourth quarter.
Its February forecast called for $333 billion in the current period but by the fourth quarter production should be back up to $541 billion.
Layoffs likely also took a toll on participation. Better.com had a significant presence among the Top Producers in recent years. But given the company’s well-known problems, including significant layoffs, it was not surprising its loan officers did not submit entries this year.
Having a strong, purchase-oriented niche helps. Brandi Schaefer, a senior mortgage officer at Safe Credit Union in Folsom, California, gets the vast majority of her business through homebuilders from relationships she has created during her 26 years in the industry.
Schaefer was No. 8 on Top Producers survey, with practically all of her over $202 million in volume coming from home purchases.
She offers a long-term lock program and that gives her an advantage. Many of her clients were locking in between last April and August because of rising interest rates.
“So in November and December, I was still locking clients in the threes, I still had them locked from April,” Schaefer said. “Why builders really reached out to me is because of my extended lock program.”
Those longer locks were on lots that at the time were “dirt,” where construction had not commenced.
Now, it has shifted to where most of Schaefer’s activity is coming from inventory homes, properties that are already ready to close. Because of the shift in the rate environment, doing extended locks is not possible.
“So I’m still closing anywhere from $10 million to $20 million a month as of right now,” she said. “Could it change? Absolutely. But as of right now, I’m still chugging along.”
Another concern, along with the high cost of housing in the state, is that her Sacramento-area market is heavily populated by people who work in the information technology field, where headlines are screaming about layoffs at some of the largest companies.
Her advice to other originators to deal with the current environment: “Work hard, service your clients. Remember, they’re the ones that said send you business.”
The producer that’s rounding out the top ten in this year’s list, Michael Borodinsky, vice president and branch manager at Caliber Home Loans in Bridgewater, New Jersey, also highlighted the importance of maintaining a focus on referral partners.
“Focus your efforts on retaining. growing, solidifying your referral base, with your purchase partners,” he said. “I’ve stayed in constant contact with my partners. I’ve given them direction in terms of what’s happening with the market and developing programs that that adapt to this market.”
Like Schaefer, Borodinsky called attention to the layoffs in the tech sector and added that they are likely to lead to personnel cutbacks in other sectors. But there’s a silver lining there — he expects interest rates to drop by one percent in the next six to nine months.
“Recession comes back into play as a possibility of the economy,” he said. “The beneficiary of all that negativity, is that it’s going to mean good news for interest rates. That will be good news for affordability and good news for the housing market.”
Mark Cohen, this year’s No. 2 producer, added “you have to adapt to the environment, you have to, or it’s failure.”
Cohen did $754.1 million, with 65% coming from purchase. In the past, much of his business was from the high-end market in Beverly Hills, California. That business is now a lot quieter, he said.
But several years ago he expanded his market into the San Gabriel Valley, where Cohen has an affiliation with a local real estate agent and is now doing between 10 and 13 transactions a month with W-2 borrowers. A significant share of his 2022 production was from non-qualified mortgages and conforming loans.
When it comes to non-QM, “rates aren’t that much different from regular loans, and the underwriting is a lot easier,” Cohen noted. Investment funds are providing liquidity for this market.
He is also working on home equity lines of credit, construction loans and even has done a couple of commercial transactions.
As for the rest of 2023, rates should be lower starting in the summer through the end of the year, he said. But the homes for sale inventory, especially in the Los Angeles area, remains a big problem and that could hold the market back.
The Top Producers survey has been in existence for 25 years and is the successor to those conducted by Broker magazine and Origination News (former National Mortgage News sister publications) as well as Mortgage Originator Magazine, of which Arizent owns the content rights.
