The Loan Store's 'Buy Before You Sell' leverages home equity toward a purchase

Company has seen exponential growth since buying Homepoint's wholesale channel

The Loan Store's 'Buy Before You Sell' leverages home equity toward a purchase

The Loan Store has launched a “Buy Before You Sell” product designed for wholesale loan originators, following up on its recent acquisition of the wholesale originations channel once owned by Homepoint.

The product rollout is the first major initiative for the fast-growing national wholesale mortgage firm as it braces for exponential growth in wholesale originations in the wake of the Homepoint deal, a top company official told Mortgage Professional America.

The product is being made available to The Loan Store’s mortgage broker and non-delegated correspondent partners via a partnership with HomeLight and is designed to help brokers improve homebuyers’ ability to secure their desired home quickly without the contingency of selling their existing home first. The product arrives amid an increasingly competitive market, with mortgage rates expected to drop by summer.

Brandon Stein, president of The Loan Store, described the product as a “contingency buster,” giving brokers a tool to aggressively pursue the purchase market by leveraging a home’s equity. “We are unlocking the equity through this “Buy Before You Sell” program so [clients] can essentially have a zero-interest line of credit to leverage that equity as a down payment on a new home without having to sell their current home as a term of purchasing the new one,” Stein told MPA during a telephone interview.

“Our partners are brokers and non-delegated lenders who can educate themselves on this product so they can do the same with their borrowers,” he added. “It’s another tool in their toolbelts, so to speak, to remain aggressive and stay in front of borrowers and the purchase market.”

The upshot: “They [brokers] are offering them a unique way for financing a new home purchase which again is leveraging the equity in the current home to be able to go out and have an aggressive offer to purchase the new home they’re looking to buy.”

The “Buy Before You Buy” offering is the latest initiatives from a notable lender amid the start of the homebuying season. Earlier this month, United Wholesale Mortgage unveiled its “Conventional 1% Down” offering, which gives certain borrowers up to $4,000 towards purchasing a home. The program is being offered to a specific demographic – borrowers with an income at or below 50% of the Area Median Income and a 97% LTV.

Product helps originators strengthen their relationships

Stein provided scenarios under which the program could potentially strengthen loan originators’ relationships with real estate agents with the spring buying season looming: “Having this tool in their toolbelts, they can work directly with real estate agents,” he said. “They can train their real estate agents, so they understand how this product works. From a real estate agent’s perspective, they may have buyers already teed up who are currently in the market, maybe have made offers on home and been denied because of this sales contingency of their current home.”

He noted that the timing of the product launch comes ahead of the traditional spring buying season. “We loved the fact this product aligned with all of our counterparties and partners, in that it’s perfectly timed to go into the purchase season,” Stein said. “This allows our borrowers to have the most aggressive possible offer given their current circumstances, whatever those circumstances might be.”

The Loan Store sees exponential growth

The product is being rolled out as The Loan Store experiences exponential growth following its purchase of the wholesale channel once owned by Homepoint – billed prior to the transaction as the third-largest wholesale lender by origination volume. “It’s an expansion,” he said of its wholesale channel, which The Loan Store had run for four years. “This has allowed us to grow our broker population by almost ten-fold.”

The Loan Store now finds itself among the big guys of the industry after its transaction with Homepoint, Stein said. “Prior to the transaction, we had about 900 approved mortgage partners nationwide; after the transaction, we’ll have over 9,000. From an LO’s perspective, we’ll have the ability to lend to over 50,000 or 60,000. It’s huge growth, and we’re very excited to take on that partnership.”

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