On June 1, Arizona-headquartered retail lender AmeriFirst Financial Inc. relaunched its forward mortgage originations. It ceased that business in December 2022 after rising mortgage rates wreaked havoc on the housing industry.
Of the 400 employees scooped up by American Pacific Mortgage (APM) late last year, about 20 LOs have returned to AmeriFirst Financial.
Eric Bowlby, CEO at AmeriFirst Financial, told HousingWire that about 50 operations staff have joined the company from other lenders, including those who returned from APM.
“I think this was always a possibility,” Bill Lowman, vice chairman at APM, said. “Not all of them were long-term fits. I don’t think it was anything that was completely unexpected, and probably, in the long run, worked out pretty well.”
Bowlby noted that AmeriFirst never closed business. The lender maintained their servicing portfolio, servicing about $1 billion of Fannie Mae, Freddie Mac and Ginne Mae loans.
In its originations business, AmeriFirst kept its business purpose lending (BPL), providing four products, including debt-service coverage ratio (DSCR) loans, bridge financing, investor construction loans and residential transition loans (RTLs). Its BPL business originates about $30 million in volume every month, according to the firm.
Now that it’s getting back into the forward mortgage origination business, AmeriFirst plans to focus on providing buyers with competitive rates by cutting branch and regional margins, which led to higher fees for buyers.
“Most companies that have branches build their models around 275 to 300 basis points at the branch. Then you have your corporate margins and you have your regional margins,” Bowlby said.
“When your branch margin is taking everything to begin with, how does a corporate make any money? Because now what they have to do is they have to go in and charge points to get their loans done,” he said.
AmeriFirst will keep physical branches in 20 states, but under a new corporate model, no branch managers will make an override on the production of the loan officers they manage.
By getting rid of regional and branch margins, AmeriFirst says it will be able to eliminate about 100 to 125 bps built into the rates, making rates just as competitive compared to mortgage brokers.
In turn, loan officers at AmeriFirst Financial will be able to provide a “sharp rate” and not get undercut by other competing lenders, Bowlby said.
“In today’s market, as soon as you pull credit, there are 30 companies buying trigger leads that are calling and undercutting you (…). If you have that extra 100 to 125 basis points in margin, it’s easy for them to undercut you,” he said.
Another priority for AmeriFirst Financial is for loan officers to target potential homebuyers before they hit the market.
In line with AmeriFirst’s new motto, “broker pricing and banker service,” Bowlby noted that he will train loan originators to convince renters to buy and bring the deal to real estate agents.
“If you, as an originator today, want to stand out, the way to do so is to have your own book of business that you can hand out to agents,” Bowlby said.
Among the licensed 44 states, origination volume from Arizona accounts for 50% of AmeriFirst’s production. Other states that bring in a bulk of the volume include California, Colorado, Texas and Nevada.
LOs at the lender receive 150 to 165 bps per loan depending on the arena, Bowlby said. He’s looking to hire more loan officers who love the banking world but don’t want to go to the wholesale channel.
Going forward, the sweet spot for AmeriFirst is closing $100 million in origination volume a month. In 2022, AmeriFirst closed $2.5 billion in loan origination, according to mortgage tech platform Modex.
“If you’re at $100 million, you’re relevant. You can afford to have all the things in place (…). When we got up to doing the $500 million a month, I didn’t even know everybody who worked for me. That’s not the way I like to work. We want to get to that number but also, at the same time, make sure it’s with all the other cultural ideas that we have of knowing, assisting and helping be a part of their lives,” Bowlby said.