Back in the Game
Booming mortgage market setting off a banker stampede in Tarrant County
It’s spring, when the thoughts of bankers turn to the blossoming $1.8 trillion mortgage market and dreams of a larger share of it.
Conspiring to fulfill those dreams are a strengthening home-buying market, increased regulations and capital requirements that have reduced the interest of the big banks and record low interest rates that have helped margins. A still-hot refinancing market has only fueled their ardor.
Worthington National Bank is a small area bank with locations in Sundance Square, two branches in Arlington and another in Colleyville and about $180 million in assets.
So why, in February, did they launch a mortgage lending operation?
“Interest rates are at an all-time low, interest rates are at an all-time low, interest rates are at an all-time low,” said Greg Morse, Worthington’s CEO.
The bank has hired Susan Williams, formerly of Kensington Residential Mortgage, to lead the effort.
“We’re in the process of building a team,” Williams said.
Bank of Texas, a heftier competitor with a growing presence in Texas and $28 billion in assets, has expressed serious intentions, as well. Earlier this year the bank hired Cue Lipscomb, formerly president of mortgage lending at Southwest Bank, as that bank moves to capture a larger share of the Tarrant County mortgage market. In 2011, Bank of Texas wrote $290.4 million in mortgage loans in Texas. In 2012, it wrote $578 million.
The bank, whose parent is based in Tulsa, wrote $59 million in mortgage business from its Fort Worth office in 2011 and is on track to write $140 million this year, executives said.
In its announcement of his hiring, Bank of Texas says that Lipscomb wrote $250 million home loans in the past three years, including $90 million in 2011 at Southwest. The move also will be accompanied by a comprehensive marketing plan that will include direct mail and other efforts, bank executives said.
“Cue is someone that has a reputation as someone who gets it done,” said Mark Nurdin, Bank of Texas CEO for the Fort Worth region.
Lipscomb, who now has the title vice president of the Fort Worth mortgage branch for Bank of Texas, brought two of his staffers with him and wrote $3.75 million in mortgages in his first month at Bank of Texas, the company said March 26.
The sense of urgency comes from a growing market and receding competition.
Home sales have continued to improve over the past year and home-building is hammering at a comeback and the mortgage demand grows.
“We haven’t had a lot-development request in years and now we have several,” said Worthington’s Morse about activity by subdivision developers.
Meanwhile, along with the new activity among consumers is a small retreat by some of the big banks. Bank of America and Citigroup have both eased back on home mortgage activity as they cleaned up their balance sheets, shed bad loans and the Consumer Financial Protection Bureau imposed stricter rules.
The big banks wrote more than 64 percent of mortgage loans in 2010, but just 53.2 percent in 2011, according to data from Inside Mortgage Finance, a mortgage information service.
This could be good for consumers. Smaller banks tend to provide more customer service and can compete on price with interest at historic lows.
Worthington’s Williams said that much of her business is based on referrals and that it is running about 40 percent new loans and 60 percent refinances.
“It’s definitely rebounding healthy,” Williams said.
She is pointing her clients toward 15-year conventional loans with payments near what a 30-year mortgage would pose. FHA and Veterans Administration loans are also options, she said.
“I’ve built a reputation on personal service and that is what’s going to carry me forward,” she said.
Since entering Texas in the mid-1990s, Bank of Texas has grown fast, to 46 branches statewide, including 10 in Tarrant County, 10 in Dallas and 11 in the Houston area.
Adding Lipscomb, is a continuation of that bank’s “localness” philosophy, Nurdin said.
A graduate of Fort Worth Country Day School, Texas Christian University and Southern Methodist University for graduate school, Lipscomb was a co-owner at BMC Mortgage for 13 years before it was bought by Southwest Bank.
“Reputation is all we have,” Lipscomb said.