New Penn launches mini-correspondent division
Lending product popular among credit unions and community banks
New Penn Financial is expanding its correspondent lending products by launching a mini-correspondent division.
In a statement the 46-state lender said under the program, mini-correspondent clients originate loans and submit them to New Penn for underwriting. Once the lender gets the clear-to-close, they sell the loans back to New Penn post-funding. The borrowers are never aware of New Penn's presence, and the loan benefits from the additional layering of underwriting.
"This new program adds the third leg to our successful correspondent and broker/wholesale business channels," said Brian Simon, COO. "We’re pleased to support the nationwide mortgage community with services that fulfill their requirements for mortgage revenue with reduced risk. We’re here to help these businesses grow."
New Penn is aggressively looking to grow its correspondent lending footprint as today's news suggests.
Earlier this year, New Penn financial tapped Lisa Schreiber to head its correspondent lending division. New Penn is headquartered in Plymouth Meeting, Pa., but its story is much bigger. The nonbank entity is a subsidiary of Shellpoint Partners, the New York-based specialty finance company touting some high-powered Wall Street types on its board — most notably securitization pioneer Lewis Ranieri.
The new mini-correspondent business model will likely be particularly attractive to community banks and credit unions. The funding allows those lenders to close in their own name, instead of listing New Penn in the mortgage documents. It thereby helps the primary lenders feel like there is more control over the process and garners greater brand awareness from the homebuyer.
The need for correspondent lending is increasing, especially on the mini-correspondent side.
Second-quarter data from the National Credit Union Administration shows federally insured credit unions experienced brisk loan growth, reporting their highest net worth since 2008 and record membership levels in the second quarter.
Loan activity increased 2.3% in the second quarter, and 5.5% over the past four quarters — the strongest growth for that length of time since the beginning of 2009. The net worth ratio also rose to 10.5%, its highest level since 2008.