Should you specialize?

Offering certain products can make all the difference in a tough housing market

Should you specialize?

Everyone knows the old saying: “Jack of all trades, master of none.” The theory behind that, of course, is that trying to dabble in everything results in mediocrity; it’s better to pick a few things and know them inside and out.

Are mortgages the exception to the rule?

Originators want to be able to help as many clients as they can, and as interest rates cause the number of refis to dwindle, loan officers these days want to have a healthy amount of purchase loans on the horizon. But as Rett Babb, director of branch sales and business development for Goldwater Bank, points out, that homebuyers are going to need to have something to purchase.

“Inventory of resale in most of the major markets in America is extremely low. Historic lows, actually. And so that makes new construction a very prevalent and desired product,” Babb said. “There’s a huge opportunity, a very, very underused and very underutilized opportunity for new construction. It is huge now and going forward it’s going to be even bigger.”

Goldwater Bank offers a single-close construction loan done in-house, which he says is attractive to builders.

“There’s very few lenders that have construction lending, first of all. And if they do offer it to their loan officers, then typically it’s an outsourced type of a thing,” Babb said. “There’s not a lot of lenders out there that are willing to invest what it takes to bring a product like this in house and then on top of that, it takes a while to get internal staff trained and up to speed,” Babb said.

Although Goldwater Bank offers a variety of other types of loans, providing a niche service well can really separate a lender – or an originator – from the pack.

“We have a whole division that does nothing but construction loans, the processing, the underwriting, everything is dedicated to construction lending and because of that, it’s a well-oiled machine. And again, for a builder, that’s all they’re worried about is, is it competitive price-wise, and is it processed the way it needs to be processed to where it’s expedient in terms of draws.”

Babb says that he gets calls “on a daily basis from loan officers and/or branch managers who want to come join because of this specialty product.”

Chad Jampedro is the president of GSF Mortgage Corporation, and they also offer single close construction loans. Although they’re a great product, he said that they have a lot of moving parts and are better suited for the more experienced originator. Rather than focus on specific products, it’s better for an originator to focus on his or her specific assets.

“I think originators should focus on their strengths and niches that they feel,” Jampedro said. “I think the best [originators] are great educators, that’s what they do different. The hard core close is gone . . . there’s too much information out there. What folks are looking for is someone to be an advisor.”