The mortgage industry is tougher than ever before, says top producer Joe Caltabiano – but it’s also presenting all kinds of new opportunities
Joe Caltabiano is one of the top producers at Guaranteed Rate, one of the nation’s largest privately held mortgage lenders. Caltabiano, who’s based in Chicago, has funded more than $2.5 billion in loans since 2001, and has been one of the top loan officers in the country every year since 2005. MPA recently sat down with Caltabiano to talk about the state of the industry, his passion for jumbo loans, and the regulatory pitfalls today’s industry faces.
MPA: How do you think the market is performing right now on the whole?
Joe Caltabiano: Mortgage markets are pendulums – they swing back and forth. For a while we saw the pendulum swing to the conservative side – increasing down payments, increasing FICO requirements. We’re starting to see the pendulum swing back the other way, with opportunities for buyers who maybe weren’t able to buy a year ago or two years ago now being able to get into the homebuying market. There are a lot of good things coming, with a stable real estate market that allows lenders and investors the opportunity to get a lot more people into homes. More homes, more sales – more opportunity for business in the mortgage space.
MPA: I understand you have a bit of a passion for helping clients into luxury homes.
JC: It goes back to the programs that are becoming available. There are 10% down programs up to $1.5 million that didn’t exist before. You’re really starting to see some opportunities for clients to take advantage of low rates and a little more leverage. You’re also seeing a lot more of those transactions take place. With low rates, borrowers’ ability to afford more is very high right now. I see is just from looking at the analytics – my average pre-approval size has gone up 30% over the last year. That’s a pretty big jump. And Guaranteed Rate is really working toward being the most aggressive jumbo lender in the country, offering program and rate. It’s a really exciting thing to be able to do larger loans and help clients who are on their third or fourth home purchase.
MPA: So it’s a good time to be in the business, then?
JC: Well, it’s hard. There’s no question that it’s a very tough industry, but I love it. With a combination of low rates and a housing market that’s really starting to move, it’s a really good opportunity for people who want to combine finance and sales skills and work with people. But make no mistake – it’s harder now than it’s ever been to get a loan from beginning to end. It takes more time, it takes more energy.
MPA: Is that because of the regulatory hurdles that have been put in place over the last few years?
JC: Yes. With Dodd-Frank Rules and TRID it’s a very regulatory and compliance-focused industry – as it always should have been. We may have strayed from that a little bit seven or eight years ago, but now it’s swung back incredibly. It takes much more work and much more attention to detail to make sure all the compliance stuff is done – which, as a sales guy, is very difficult and very burdensome on my team. It’s definitely a lot harder in the industry these days.
MPA: What does the future hold for you? Is there anything unique happening with property in Chicago?
JC: My business was built on new-construction condos. That’s what made my business what it is – the opportunity to work one building and have 300 buyers purchase in there. Three hundred buyers meant 1,000 people walked through, so you’re talking about a high volume of people. I’m excited to see new-construction condos come back, since it’s kind of been my specialty over the years. I look out my window in Chicago, and there are cranes in every direction. Seeing that boom of real estate is very exciting for me. Chicago’s still in the boom. We’re seeing price per square foot go up 10% and 20% on new construction pretty regularly.
MPA: How do you think the market is performing right now on the whole?
Joe Caltabiano: Mortgage markets are pendulums – they swing back and forth. For a while we saw the pendulum swing to the conservative side – increasing down payments, increasing FICO requirements. We’re starting to see the pendulum swing back the other way, with opportunities for buyers who maybe weren’t able to buy a year ago or two years ago now being able to get into the homebuying market. There are a lot of good things coming, with a stable real estate market that allows lenders and investors the opportunity to get a lot more people into homes. More homes, more sales – more opportunity for business in the mortgage space.
MPA: I understand you have a bit of a passion for helping clients into luxury homes.
JC: It goes back to the programs that are becoming available. There are 10% down programs up to $1.5 million that didn’t exist before. You’re really starting to see some opportunities for clients to take advantage of low rates and a little more leverage. You’re also seeing a lot more of those transactions take place. With low rates, borrowers’ ability to afford more is very high right now. I see is just from looking at the analytics – my average pre-approval size has gone up 30% over the last year. That’s a pretty big jump. And Guaranteed Rate is really working toward being the most aggressive jumbo lender in the country, offering program and rate. It’s a really exciting thing to be able to do larger loans and help clients who are on their third or fourth home purchase.
MPA: So it’s a good time to be in the business, then?
JC: Well, it’s hard. There’s no question that it’s a very tough industry, but I love it. With a combination of low rates and a housing market that’s really starting to move, it’s a really good opportunity for people who want to combine finance and sales skills and work with people. But make no mistake – it’s harder now than it’s ever been to get a loan from beginning to end. It takes more time, it takes more energy.
MPA: Is that because of the regulatory hurdles that have been put in place over the last few years?
JC: Yes. With Dodd-Frank Rules and TRID it’s a very regulatory and compliance-focused industry – as it always should have been. We may have strayed from that a little bit seven or eight years ago, but now it’s swung back incredibly. It takes much more work and much more attention to detail to make sure all the compliance stuff is done – which, as a sales guy, is very difficult and very burdensome on my team. It’s definitely a lot harder in the industry these days.
MPA: What does the future hold for you? Is there anything unique happening with property in Chicago?
JC: My business was built on new-construction condos. That’s what made my business what it is – the opportunity to work one building and have 300 buyers purchase in there. Three hundred buyers meant 1,000 people walked through, so you’re talking about a high volume of people. I’m excited to see new-construction condos come back, since it’s kind of been my specialty over the years. I look out my window in Chicago, and there are cranes in every direction. Seeing that boom of real estate is very exciting for me. Chicago’s still in the boom. We’re seeing price per square foot go up 10% and 20% on new construction pretty regularly.
