JPMorgan Chase mortgage banking national sales executive Joe Cartellone reveals the organization’s plans for the year ahead and his predictions for the mortgage industry
What is Chase’s main focus in terms of the mortgage production channel for 2013?
A. Our primary focus for mortgage production in 2013 is to grow market share, help customers realize the dream of homeownership, and deliver an outstanding customer experience. For us, it’s not simply about making a loan. It’s about making a loan that the family can afford over the long term, and deepening our relationship with the customer.
We continue to invest in this business by growing our sales force and introducing technology applications to improve the customer experience. Over the past two years, we added 1,600 mortgage bankers, bringing our total to 4,700. We have built capacity to meet the growing demand from customers who are interested in buying a new home or refinancing their existing home.
Also, we recently introduced a new mobile app, Chase My New Home. More than 110,000 people have downloaded the app, and we are hearing great feedback from users. It allows prospective homebuyers to search and rate housing options based on personal criteria; record notes, photos and videos about the houses; calculate payments; and schedule meetings with local Chase mortgage bankers. These are just a few of the ways we are making it easier for customers to do business with us.
Do you see demand ebbing if rates tick up over 4%?
A. I think demand will continue to be strong, even with a slight increase in interest rates. If rates get closer to 5%, I anticipate fewer homeowners will decide to refinance their home, but I don’t think it will discourage prospective buyers from purchasing a new home. And rising rates should be a reflection of an even stronger economy, which means even more homebuyers in the market. The economy has improved, and the housing market is strong. It’s a great time to buy a new home.
Will there be growth in the overall correspondent channel?
A. We will continue to grow and invest in our correspondent channel. Today, we are the second largest correspondent lender in the country, up from the third largest the prior year. It’s a very good business for us. It gives us a great opportunity to not only service new loans but also expand our relationship with these customers by offering them other banking products, whether it be checking, savings, investments or credit card accounts.
JPMorgan Chase made the decision to close down origination through mortgage brokers to focus on its proprietary channels. What brought the bank to that decision and what impact has it had?
A. We wanted to better control the customer experience. We’ve focused a lot over the last couple of years on direct engagement with customers. It’s the right approach for us, and one that is working. We were recently ranked number one for customer satisfaction among large banks for originations and servicing by J.D. Power.
Brokers were made scapegoats for the dangerous lending practices prior to the financial collapse. What can they do to help to rebuild the industry’s reputation?
A. Set the bar high for the lending officers you employ. Train them well and place a lot of emphasis on loan quality.
Would Chase consider a return to the broker channel should the industry prove viable?
A. We have no plans to return to the broker channel. We are focused on managing the customer experience and improving overall customer satisfaction. We’ve made great strides over the last year, and we attribute much of this success to our focus on customer experience.
What is Chase’s outlook on the nearterm future of the housing market?
A. Every month we’re seeing more signs that the housing market is recovering. The median price for new homes increased 7.2% in 2012. New home sales in March were up 18.5% from a year prior. Pending home sales recently reached the highest level since March 2007. Chase is seeing similar growth trends. In the first three months of 2013 our mortgage loan originations were $52.7bn. That’s up from 37% year-over-year. We have helped nearly 950,000 individuals and families purchase homes over the last four years. We also helped more than 2.4 million individuals and families refinance their homes over that same period of time, saving the average homeowners $200 per month.
We are encouraged by these results and expect housing demand to increase over the course of the year and into 2014.
Which markets in particular does Chase see as areas of growth for 2013? How are you looking to penetrate those markets?
A. Our branches cover most of the core markets across the country, including California, Florida, New York, Texas, Illinois, Arizona and other major cities, and we have a top-three share in almost all of those markets. We rely heavily on retail originations and will continue to add mortgage bankers to cover those branches. I anticipate the number of loans that are initiated by our branches will grow significantly.
We are offering a number of local educational resources to arm prospective homebuyers with the information they need to make informed housing decisions. For example, we’re holding hundreds of home-buying workshops across the country at our branches and other locations in the community where people can come to talk to our mortgage professionals.
We have a multifaceted approach to communicating with new and existing customers. From our mortgage bankers in branches and in call centers, our outstanding interactive website, events we host and local partnerships we build, our tentacles spread far and wide. Ultimately, we want to attract new home-buyers and expand our relationship with existing customers. We think we have the right products and programs to achieve this goal.