RISMEDIA, August 23, 2007—Lend America, a privately owned direct-to-consumer residential mortgage lender with a core focus on originating government-insured loans, announced its business remains strong. As it continues to help consumers address their mortgage needs, especially now, many other industry players encounter difficulties in the current mortgage environment.
This increase in originations is being experienced in all of the 30 states Lend America is licensed to do business in, as consumers seek relevant alternatives and solutions to their personal mortgage situations. Due to its refocused business model, on originating government-insured loans, Lend America says they see significant opportunities to continue to suggest mortgage products and ideas that will truly change the borrower’s life and build its business through the current market environment.
“Approximately eighteen months ago, Lend America saw the potential for the residential lending market to be impacted as many mortgage lenders stretched their underwriting standards and non-prime ARM originations increased dramatically,” commented Michael Ashley of Lend America. “As the risk reward relationship, for both the consumer and lenders, was reaching an inflection point, Lend America had the vision to refocus it business model and began to primarily originate FHA mortgage loans. This strategy proved correct and we are now in a position to be part of the solution for consumers.”
Over the last three months, Lend America has experienced a very high level of inquiries through its centralized retail channel. A large number of these inquiries are being generated by the company’s advice driven marketing campaigns that are highlighting the benefits of government- insured or FHA loans and allow borrowers to have an immediate dialogue with an experienced loan officer. The company’s staff of highly trained consultants are able to start working with borrowers immediately and advise on the various mortgage options that are available and guide them into the right loan program that fits the borrower’s long-term needs.
Ashley continued, “We believe we have a responsibility to help fill the current void in the residential lending market caused by many mortgage lending companies closing or curtailing operations. We are fully committed to work closely with borrowers to help them understand the full spectrum of products available, including fixed rate government-insured mortgages that can help solve their concerns surrounding mortgage financing.”
According to the company, trillions of dollars of adjustable rate mortgages (ARMs) will have their payments reset higher in 2007 and 2008, with many already having reset. Borrowers already struggling will be impacted further, as interest rate on this class of products reset. Due to the uncertainty in the marketplace, many leading mortgage companies are reducing mortgage product options and tightening product and underwriting guidelines making it harder for borrowers to refinance. Couple this with declining housing values and many borrowers are in a crisis mode.
“These developments are increasing the number of delinquencies and foreclosures especially for those borrowers with non-prime credit and limiting the opportunity for first time home buyers,” Ashley said. “Although Lend America offers a full range of home purchase and refinance programs to meet our clients’ individual requirements, we believe fixed rate government-insured loans offer a real solution for consumers looking for peace of mind during these uncertain times.”
“When we refocused our business on originating fixed rate government-insured FHA loans, we took the time and the expenses to retrain our entire staff to fully understand the dynamics of this product and to focus on the client relationship by taking a consultative approach,” continued Ashley. “Putting a client in the right mortgage at the right time is the foundation to our customer centric approach. And, with the pending FHA Modernization Legislation, which could increase the current conforming loan limit of $417,000, Lend America is in a strong position to help even more borrowers find the right mortgage solution.”
In the early part of 1980s, FHA loan originations accounted for 20% of total mortgage volume, but share of the market declined steadily to 8% in 1999 and approximately 2% in 2006. In 2006 total FHA volume decreased to $54 billion compared to $145 billion in 2002. In contrast, nonprime originations comprised more than 20% of the 2006 market, up from 7.4% in 2002. The main reason for this dramatic shift was that many non-prime loans were easier to originate and required less documentation and processing than FHA loans.
For more information, visit www.lendamerica.com.