Homebuyers unaware of benefits of "beautiful" MI, he says
After closing 2020 with almost $100 billion in mortgage volume, Rocket Pro TPO appears to be in a good place, judging by the mood of the company’s executive vice president, Austin Niemiec (pictured). Seemingly unruffled by the recent UWM broker ruckus, Niemiec has his sights set on other, more pressing issues.
The 35-year-old EVP, who also oversees Rocket’s Charlotte and Detroit teams, is focused on aggressively promoting a much-maligned product, particularly among clients but also some industry professionals - mortgage insurance (MI).
“A lot of Americans think that MI is a bad thing, but it’s actually a beautiful thing. It allows you to purchase a home by putting less down. As a consumer, having liquidity to invest, it gives consumers power,” he said.
He argued that it didn’t make hard economic sense to put 20% down for a house in order to avoid paying MI, something many clients were still choosing to do.
“If you’re purchasing a home for $420,000 and you put down 20%, that’s $84,000 cash you have to bring for a down payment. But for that same purchase price you put 5% down with mortgage insurance – that’s $63,000 difference in cash.”
The proposition becomes even more attractive to buyers when they consider monthly MI payments of “only $70 a month”, he said, adding that the cash the buyers save can then be invested.
“If you save $63,000 and invest it at 4% a year, you’re making $2,500 a year, and the mortgage insurance is only $840 a year, so you’ve tripled your investment. Cash is king.”
He said educating the client was crucial in breaking down misconceptions, such as letting the buyer know they could still get their home after putting down “as little as 3%.”
Asked why Rocket was focusing on promoting MI now, given that it had always been an integral part of the company’s business, he said: “It’s a good question. We’re constantly raising the bar for mortgage brokers in our obsession to provide them with value that helps them serve their clients and win more business.”
Being the biggest mortgage lender in the US has given Rocket the ability to offer “the best deals on MI,” he said, although Rocket’s fees are not refundable if, for instance, the client moves or sells their home.
Having previously led the Account Executives at Quicken Loans Mortgage Services (QLMS), Niemiec joined Quicken Loans in 2009 as a mortgage banker. It’s safe to say those formative years were an ideal training ground for understanding the needs of homeowners and establishing a robust client roster, numbering thousands.
It also gave Niemiec, who has a Hillside College bachelor’s degree in business, management and marketing, the necessary experience to quickly gauge product response - a skill that’s come in handy during Rocket’s latest MI campaign.
“The response has been incredible,” he said. “Usually, you can tell if the response has been great, based on how many loans they’re trusting us with, and our purchase volume has skyrocketed - we had the biggest purchase month in the history of our company in May.”