Friday Funding is a HousingWire web series that profiles the lending segment in depth, while highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Jackie Weed, vice president and director of correspondent lending with Embrace Home Loans.
HousingWire: Who is your target customer and why are they a good fit for your business model?
Weed: Our target customer is the correspondent lender that is seeking an investor that is a true partner; providing value adds that not only make the transaction easy but also supports their marketing and lending growth initiatives. Embrace Home Loans’ business model is extremely customer-centric. We pride ourselves on building true relational partnerships with our correspondents.
HW: How does lending fit into your overall business strategy? In other words, what other lending divisions do you have, i.e. warehouse, wholesale, etc.?
Weed: Embrace Home Loans has been a national retail originator and servicer for the past 30 years. The correspondent division shares the same set of values on which Embrace was built and is committed to offering our correspondent partners knowledgeable support, personal attention and great technology. Embrace is a responsive lender with attentive, best in class customer service based on a deep understanding of market cycles and loan products. We use this experience to assist our correspondent partners by offering the same level of service and competitive mortgage solutions for their customers.
HW: What do you see as the greatest challenge(s) your clients face today?
Weed: The greatest challenges our correspondents face today are the increase in regulatory compliance and federal oversight as well as a very competitive market. There is a tremendous amount of effort being placed in meeting the new compliance requirements which is truly affecting all mortgage lenders.
HW: What made your firm decide to ramp up its correspondent division?
Weed: Strategically, we have long identified the benefits of developing a correspondent lending group, taking our proven practices in the direct-to-consumer and retail spaces, and bringing those together as a differentiating solution to correspondent lenders. Our correspondent division will continue to promote Embrace’s national brand, as well as provide custom tailored solutions for our correspondent partners.
HW: How broad of a market do you serve today and what does the next 12 months look like from an expansion standpoint?
Weed: Embrace purchases mortgage loans in 45 states. We will continue our strategic growth by expanding our relationship manager team throughout the country to continue to bring personalized service to correspondent partners nationwide.
HW: There have been a lot of new entrants into the correspondent market over the last 12 months, what is going to be the key that helps your firm rise above the rest?
Weed: Embrace embodies the customer service values and trust that are critical to the foundation of correspondent relationships. Embrace has an incredible reputation, financial strength and a strong management team in place to offer unprecedented support to our correspondent lending partners. Our model is driven by the customer experience and our passion to help our correspondent partners and their customers. Our partners have dedicated relationship managers, access to decision makers, competitive products and pricing as well as custom tailored training and marketing support. We don’t need to be the biggest investor out there, but we are definitely committed to being the best.
HW: With the increased competition in the correspondent arena, what do you think is the single most common mistake you see other correspondents making?
Weed: The most frequent mistake I have seen other correspondent Investors make is jumping into this business without a major focus on the customer experience and the operational support aspect of the business. From the application process to the actual purchase of the loan, the operational platform must be efficient and easy to maintain a very high level of customer service.
HW: Tell us about the team you are building and who sits at the core of the operation?
Weed: We have brought on a team of seasoned correspondent relationship managers who are passionate about the business and helping others. Brent King, our sales manager has extensive correspondent lending experience, as well as secondary marketing experience. At the heart of our client experience is Beverly Lietz, who has been dedicated to working with correspondent lenders for over 20 years. Claudia Mobilia, our first vice president and operations manager who oversees our underwriting teams, and Brian Gilpin, vice president and director of capital markets, who boasts over fifteen years of capital markets experience, manages our pricing, trading and security issuance.
HW: What do you see happening to spreads over the next 12 months and how will the potential for rising rates impact your business?
Weed: It is very hard to predict what spreads will look like over the next 12 months. Embrace has spent well over a year re-positioning our business to continue to offer a great customer experience in what we believe will be a higher interest rate environment and the movement from a refinance to purchase driven market. We also believe that our focus on true correspondent partnerships will afford us the opportunity to assist our partners as they help their customers during market changes.
HW: Finally, how will new compliance rules impact your business? What are you doing to stay on top of compliance, i.e. technology, new software, etc?
Weed: Embrace Home Loans is dedicated to a culture of compliance and is pleased to support an environment of quality originations. We have all seen significant changes in the regulations over the past few years and of course more complex change is coming. We have made significant investments in technology, business procedural changes and controls and have very experienced team members managing all aspects of our compliance initiative. All while maintaining an amazing customer experience for all of our customers.
