Guild Mortgage Reports Strong 2016 Third Quarter; Gains in Purchase Loans, Refinancing and Servicing
Fastest-Growing Regions Include Southeast, Colorado, Northwest and Southwest
– Guild Mortgage, one of the largest independent mortgage bankers in the U.S., reported increases in purchase loan volume, a substantial jump in refinancing and a trend toward larger loans being issued through the first nine months of 2016.
Total loan volume reached $11.6 billion in the first nine months of 2016, up 8.2 percent from $10.7 billion in the same period in 2015. The average loan size was $231,923 in the third quarter of 2016, up 7.1 percent from the 2015 third quarter.
Purchase loans totaled $7.9 billion in the first nine months of 2016, or 68.4 percent of all loans, and up 4.9 percent from the previous year period. Continued low interest rates contributed to a strong nine months for refinanced loans, reaching $3.7 billion, up 16.0 percent from $3.2 billion in the 2015 period.
Guild continues to grow its servicing business, with $27.9 billion and 146,026 loans serviced as of Sept. 30, 2016, up 34.1 percent from $20.8 billion and 115,005 in the same period in 2015. Guild will achieve a new record in servicing volume for the year, exceeding the $22.3 billion in 2015, which was up 34 percent from $16.6 billion in 2014.
This year’s growth continues a trend started in 2010. Loan volume has more than tripled from $4.1 billion in 2010 when Guild operated from 75 branches in 16 states to $13.8 billion in 2015, with 234 branches in 25 states.
Mary Ann McGarry, president and CEO, said Guild was pleased to see record growth in some of its newer regions in the Southeast and Southwest, with continued strength in the Northwest and the Mountain states.
“A key to our continued growth has been how well our loan professionals are connecting in the communities they serve and closing loans faster than the industry averages,” said McGarry. “As a result, our customer satisfaction scores are at record levels throughout the U.S. This customer service culture will be more important in coming months as interest rates rise and we need to offer homebuyers more options.”
Guild introduced one new option in the third quarter: its down payment investment program with FirstREX. Under the program, FirstREX contributes up to half of a 20 percent down payment in combination with a Guild Mortgage loan to empower more people to buy the home they really want. Buyers who only had a 10 percent down payment can now achieve 20 percent, qualify for a larger loan, enjoy a lower monthly payment and benefit from not paying mortgage insurance or carrying a second mortgage. The program was launched in California, Washington and Oregon. FirstREX’s contribution is an investment, not a loan, with the company hoping to earn a return on its investment from a portion of the appreciation when the homeowner eventually sells.
“We’ve had wonderful feedback from the first homebuyers using this program,” McGarry said. “Guild helped one San Diego-based borrower move into a newer, larger home in a newer community without coming up with additional money, or asking family and friends to contribute. The sale of his previous home covered the down payment and closing costs of the new home. The new loan with FirstREX participating reduced the borrower’s monthly mortgage payment by approximately $400/month, allowing the family to put the savings toward higher education for their children.”
The No. 1 region for growth during the first nine months of 2016 was the Southeast region (Georgia, Florida, Tennessee, Arkansas), with loan volume of $736 million, up 56 percent from $471 million in the 2015 period. Colorado was No. 2, with volume of $757.3 million, up 31 percent from $577.3. The Northwest region, which is Guild’s largest and includes Washington and Oregon, was third, up 30 percent to $3.4 billion from $2.6 billion. The Southwest region (Arizona, New Mexico and Nevada) was No. 4, growing 27 percent to $1.3 billion from $1 billion.
Guild offers a wide range of residential mortgage products, with in-house underwriting and funding, which provide consistency and speed throughout the loan process. Its loan professionals can serve the needs of any homebuyer, from helping first-time homebuyers achieve their dream of home ownership, often through government loan programs, to providing jumbo home loans. Guild also specializes in helping active duty and retired military personnel to secure VA loans, which provide 100 percent financing and flexible qualifying standards.