"It's like a family"

There are scores of veterans in the mortgage industry who are experienced enough to have witnessed firsthand at least two major crises in the housing sector – one being the 2008 financial crash - but it’s doubtful that many have done so working for the same company during all that time.

Mike Mell (pictured) is one of the supposed few, having spent a quarter of a century at Freedom Mortgage, the Boca Raton-based firm that’s also one of the largest VA and FHA lenders in the country.

Mell had a particular reason to celebrate as he was recently promoted to senior vice president of the firm’s wholesale division, the transition into which was made easier by the close-knit culture he believes is deeply embedded in the company.

“We send out the anniversaries for people here and mine just came up last month, but there's salespeople that have been here longer than me,” he said, downplaying the achievement.

“It's like a family, there's no doubt about that. Stan (C. Middleman, Freedom Mortgage’s CEO and founder) treats everybody with respect - he's just a great person to work for; very inspiring,” he told Mortgage Professional America (MPA).

Read more: Industry veteran joins Freedom Mortgage as SVP of wholesale lending

The advantage of having worked for so long at the same firm means that Mell was able to hit the ground running for his new role, as he already knew most of the members of his team.

But with the housing market now entering a period of contraction almost as severe as any he has ever known, getting down to brass tacks as quickly as possible will be a plus. 

“It's tough,” he admitted. “One of the things that's hurting the market in general is the affordability situation.

“Back in June it was impossible to get a house so (brokers) had all these loans ready to go, just needing a house, but now those people that can get a house can't qualify anymore. Affordability is the toughest issue right now for everybody, and it's not just the veterans – it’s all the FHA borrowers across the board.

“Basically, rates have doubled from the February/March timeframe to now - that's a big difference. You're talking about $1,200 a month for somebody that's already probably stretched - it's a big deal and it's hurting that group a lot.”

The group that relies on Freedom Mortgage to provide them with housing finance is made up of more than 1.8 million homeowners, mostly army veterans, families currently serving in the military and those underserved borrowers with low down payments. They are also the ones who will be feeling the pinch more than most.

Mell made no bones about the fact, admitting that there was not much wriggle room to help would-be homeowners.

“In the government space you have some room, there’s some flexibility, but as far as getting outside of that, that's really not what we're focused on. We're not going to get into non-QM programs, we're going to stay focused on what we do, and unfortunately, it's a retracted market, people are just sticking it out, saying they’re going to have to wait a little bit and see what happens with the market.”

The crisis is compounded by the difficulties many wholesale lenders are experiencing. Last month, Fitch downgraded the ratings for two - Provident Funding and Finance of America – just weeks after AmeriSave Wholesale Mortgage Solutions and Suburban Mortgage abruptly shut down. And they weren’t the only ones this year.

Others like Homepoint, the country’s third largest wholesale lender, have been forced to lay off staff, while Freedom Mortgage, which is ranked as one of the country’s top government-insured lenders, had its outlook revised to “negative” by Fitch recently.

Read more: Lenders' ratings cut by Fitch

Mell acknowledged that it was an industry-wide problem, going as far as to say that the current market conditions were almost as difficult as those following the 2008 crash.

“We're all kind of in the same boat dealing with it. But obviously it helps that we have a good plan going forward,” he said.

There's a lot of competition going on out there, there are companies out there that are aggressively going for it. Unfortunately, there are also companies that are not able to stay in business, they've had close wholesale.

“But the goal here for us is just stay focused on what we know we can do, which is again, serving those veterans; the active military, and making sure that the brokers that are working in those areas have an outlet, because that's really what we're doing - that's where our expertise is.”