Friday Funding is a HousingWire web series profiling the lending segment in depth, and highlighting the operations and the people that make this sector tick. In the latest installment, we sat with Cari McCue from Guardian Mortgage to learn about the firm's recent entrance into the correspondent division.
HW: Who is your target customer and why are they a good fit for your business model?
Cari McCue: Guardian Mortgage Company’s target customers are community banks, credit unions, small and mid-sized independent mortgage bankers. Those customers are a good fit for us because we can add value to their company and their relationships with their customers. Guardian is an independent mortgage banker that doesn’t compete with our client’s customers for other accounts or cross-sell any other products. We maintain the relationship in our servicing portfolio.
HW: How does lending fit into your overall business strategy? In other words, what other lending divisions do you have, i.e. warehouse, wholesale, etc.?
MC: GMC has been 100% retail for over 48 years. Adding the Correspondent division last year has accelerated the company’s servicing growth.
HW: What do you see as the greatest challenge(s) your clients face today?
MC: There are two major challenges our customers face today: 1) Transition to a market with less refi opportunities as a result of rising rates. They will need an aggressive approach and strategy to gain a share of purchase business. And 2), our clients will need to stay ahead of all of the CFPB rules and regulations with regard to compliance and quality. This is a must to stay in the game and some banks may find themselves unable to comply due to size and/or resources.
HW: What made your firm decide to ramp up its correspondent division?
MC: Being an independent mortgage banker, GMC values our servicing department and saw a Correspondent Lending Division as a way to grow our servicing portfolio.
HW: How broad of a market do you serve today and what does the next 12 months look like from an expansion standpoint?
MC: Our current market includes Texas, Oklahoma, Arkansas and Colorado. We have plans to expand in the future. However, Guardian is confident that this region has tremendous opportunity with great volume and great quality.
HW: There have been a lot of new entrants into the correspondent market over the last 12 months, what is going to be the key that helps your firm rise above the rest?
MC: Most correspondents will start by talking about customer service, we have found that can have a wide range of meanings. Three key factors set Guardian apart from our competitors: First, we start by knowing our customers and they know us. Guardian has experienced personnel to provide our customers with an outstanding method of communication. They can easily and quickly get answers to any question or scenario.
Second, we retain 100% of our servicing by Guardian employees in Richardson, Texas (not a sub-servicer). So, our customers know their customers will have one point of contact for the remaining term of their loan.
Third, GMC has had a long standing reputation as being a quality lender since 1965.
HW: With the increased competition in the correspondent arena, what do you think is the single most common mistake you see other correspondents making?
MC: Guardian has seen other correspondents trying to grow and expand too quickly and as a result, they over commit and under deliver. GMC has always believed in controlled growth. Due to this calculated approach, we are able to offer our clients 48 hour turn times for loan review along with personalized service. We don’t believe in short-term relationships, with each and every client, Guardian strives to be a lender for generations.
HW: Tell us about the team you are building and who sits at the core of the operation?
MC: Cari McCue founded, oversees and runs Guardian Mortgage’s Correspondent division, manages retail and correspondent pipelines with a combined total of over $100 million monthly, along with hedging and securitizing in the secondary market. She has a passion for the industry and for the team she surrounds herself with, which shows in her effective leadership style and inspiring work ethic.
Cari was recently promoted to Chief Operating Officer for Guardian Mortgage after serving as Senior Vice President for the past 15 years. She is an accomplished executive with over 17 years in mortgage banking as well as serving as an in-house expert in the company’s technology platform. As an industry leader, she has been a key factor in growing Guardian Mortgage rapidly, ethically and responsibly.
Also integral to the success of Guardian’s Correspondent division are Joe Collins, Len Murray and Laurie Simmons.
HW: Correspondent lenders are paying a high premium for loans. What do you see happening to spreads over the next 12 months? How will rising rates impact your business?
MC: Spreads will go down and margins will tighten, not just from rising interest rates, but also from the cost of compliance. We anticipate a longer than expected pricing war, but believe we will eventually get back to reasonable margins.
HW: Finally, with all the new compliance and regulation rules coming out, how will new compliance rules impact your business? What are you doing to stay on top of compliance, i.e. technology, new software, etc.?
MC: Guardian takes the CFPB regulations very seriously and it is at the top of our all employees priorities. We are also passionate about educating our clients and staff to help implement policies and procedures in order to be compliant. We have also hired key experienced senior level staff including Bryan DeShasier, Chief Risk Officer and Rolanda Legg, Chief Compliance Officer, among others to help in these efforts in the new regulatory environment.