Big fish in the smallest pond
BAXTER — Early spring is seen as an advantage in housing market and a Baxter mortgage business is poised to grow as the economy recovers.
Tom Hice started Tower Mortgage as an independently owned and operated lakes area business in 2000. But he found as client loans were sold to other entities, he lost repeat business when they refinanced. Hice sold Tower Mortgage in 2007, which turned out to be a good time to get out of a smaller mortgage company.
After being recruited by Nationstar Mortgage, Hice, as sales manager, opened an office on Elmwood Drive in Baxter. Being part of a larger organization came with the backing and greater options. Hice said Nationstar Mortgage services more than $170 billion worth of home mortgages with more than a million clients.
“We’re the largest non-bank servicing mortgage company in the United States,” Hice said.
Nationstar has been around for 15 years with a retail presence for five years. Nationstar went public on March 8. The company has 2,600 employees.
“This is the first smaller town retail office they’ve started,” Hice said of Baxter. The city’s presence was noted at the sales managers’ meeting in Dallas.
Recently, the Baxter office expanded into larger space. Hice hired three employees and is now looking for two more.
The mortgage company handles Rural Development, FHA, Fannie and Freddie Mac, conventional loans, investment and second properties, lake properties, final construction loans and works with clients in the Home Affordable Refinance Program (HARP), the Obama administration program aimed at keeping people in their homes but getting them a more affordable, stable mortgage. HARP is for homeowners who are current with their mortgage but who have been unable to get traditional refinancing because the home value has declined.
“We can go up to 125 percent of appraised value on refinances from other investors,” Hice said, noting by other investors he means they may be making payments to Bank of America or Citi. The goal is to help people reduce payments while they are underwater — meaning they owe more on their mortgage than their home is now worth. Hice said that’s never been allowed before, but it’s a way to help people stay in their homes as the economy and market recovers. If the homeowner has a mortgage with Nationstar, they are not limited by a percentage of the appraised value, Hice said, so if the home is now worth $100,000 and the mortgage is $200,000, there are still options to refinance.
The HARP program expires at the end of the year, so if people think they may be eligible, Hice said they should inquire about it.
The ability to offer mortgages, loans and refinance, as well as service loans — so payments may be made locally at the Baxter office, or be mailed or made online — is part of the attraction, Hice said. For customers, Hice said a web portal is created for them so they can make payments online and Nationstar doesn’t sell its loans.
“We have the servicing that somebody might get if they lived in a big town or big city, Minneapolis, Chicago, Dallas.
Nationstar has four offices in Minnesota — Maple Grove, Edina, Delano and Baxter. Hice said there are 8,000 existing clients in the area.
During the housing market decline, Hice said Nationstar was instrumental in helping people stay in their homes. Hice said Nationstar has one million HARP clients.
With an office not far from Costco’s planned construction site, Hice said they feel well-positioned for the future. The mortgage office employs Linda Cantwell, Todd Sorensen and Brett McComas. Cantwell is an experienced processor and has many years of underwriting and processing experience with large mortgaging companies and mortgage insurance companies. Sorensen previously worked at American National Bank in Pequot Lakes. McComas is a recent graduate with a marketing and finance background.
“I would really love to find a loan officer who has been around for a long time with some experience who wants to come join us,” Hice said.
He said the housing market is coming back in the Brainerd area with multiple offers and the warm winter and early spring played a role in keeping people actively looking at homes on the market. Hice said clients are coming back in with an interest in lakes homes.
“It’s nice to see that part of the business come back to us,” Hice said.
Another option people have explored with gusto is reducing the terms on their mortgage, down to 15 and 10 years.
Hice also works with clients who come in wondering if they will be able to purchase a home in the future, maybe two years out. He sees part of his effort to be an educator as they work to build up their credit score and he’s seen some of those people come back ready to be homeowners.
Even after a foreclosure, depending on the type of loan, Hice said people can go back to homewnership in two or three years.
“A lot of people are surprised when they call that we can help them,” Hice said.
Sorensen said seeking a consultation to determine if payments will be reduced through a refinance or checking to see if they could cut years off the repayment period and potentially save thousands doesn’t cost a homeowner anything.
“There are options for people,” Sorensen said.
As for the market, Hice said they are seeing activity they haven’t seen in three years. “We’re on the upside. I think we are going to have a great 2012 for refinance and mortgage. I really think we’ll have our best year since 2005-2006. I think that’s what gives us hope the market will right itself.”