"We cast a wider net than everyone else"

Adam Slack (pictured), senior vice president of mortgage lending at Rate, knows what it means to maintain a leading edge in a constantly shifting market. However, Slack’s first career aspirations revolved around finances – not mortgages.

“I was a finance major at UNCW and always wanted to be a financial advisor or stockbroker,” he told MPA. However, the 2008 financial crisis altered his trajectory. And, as he was graduating, the crisis hit – meaning opportunities in his chosen field dried up.

“No-one was hiring,” he said. This led him to a temporary role at Wachovia, which later became Wells Fargo. “They actually hired and fired 60 of us at UNCW over several months as rates went up and down.”

The volatility of this early experience underscored the need for stability, prompting Slack to join a broker in North Carolina.

“I realized I was actually working as a financial advisor in a different capacity and started to enjoy the business,” he told MPA. “Many in my industry jump from company to company, but we have one of the best platforms out there. Banks have their own set of guidelines, programs, and rates, giving them control over the transaction from start to finish. As a correspondent lender, Rate provides the best of both worlds.”

Adapting to market changes is a critical aspect of Slack’s role. The mortgage landscape is continually evolving, with frequent updates in guidelines and market conditions.

“We have continuing education on these pieces all the time,” Slack explained. Furthermore, the emergence of the non-QM market has also been a significant driver in recent years.

“This market includes bank statement loans and DSCR (Debt Service Coverage Ratio) loans,” he explained. “We’ve developed proprietary programs with hedge funds and institutional investors to package and sell these mortgage-backed securities.”

Interest rate objections are another hurdle. With rising rates, affordability becomes a concern – as Slack points to solutions like the 2-1 Buy Down program.

“The rate is 2% lower the first year and 1% lower the second year,” he told MPA, contrasting this with permanent discount points.

And, despite being a non-bank lender, Rate competes robustly with traditional banks. Slack believes their edge lies in their wide array of products and competitive rates.

“We cast a wider net than everyone else with proprietary programs like the Edge program and DSCR loans,” he said. However, there are some limitations, such as lot loans and construction-to-perm financing, typically offered by regional banks.

Investment properties and second homes form a significant part of Slack’s portfolio.

“There’s a large shortage of homes, driving rents up,” he explained. Investment properties offer tax benefits through depreciation, and rental income often covers expenses. Rate’s programs make it easier for self-employed buyers to enter this market. “The Edge program and DSCR loans are particularly beneficial,” added Slack.

The housing shortage and the massive transfer of wealth from baby boomers are shaping the market. Programs like the 1031 exchange allow sellers to defer capital gains by reinvesting in like-kind properties, a strategy frequently utilized.

Finally, the second home market, especially in coastal North Carolina, has seen robust growth post-COVID.

“People from all over the country want to buy in the Carolinas,” Slack said. “They have to use the property for personal vacation use, impacting their ability to offset debt with rental income. Our clients work hard to build their businesses, and it’s our responsibility to help them protect and grow their assets.”