Access National Mortgage has seen a distinct pricing advantage from mandatory execution.
In 2003, Access National Mortgage, a subsidiary of Access National Bank, was experiencing a surge in refinance volume that presented a set of new challenges. At the time, Access National Bank held $250 million in assets, while the mortgage company was closing over $100 million a month in mortgages. The company was executing loans on a best-efforts delivery model to several secondary market investors, each of which had its own unique guidelines and requirements.
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Carolina Bank drew on CMC’s broad secondary market expertise to move toward mandatory delivery.
As a locally owned community bank with a burgeoning wholesale lending division, Carolina Bank was acutely aware of the need to stay competitive in order to continue the growth it had enjoyed over the last several years. Not only was Carolina Bank facing competition from other banks but – more and more – it also found itself in direct competition with its own investor purchasers.
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Cunningham & Company's mandatory pricing power has allowed it to expand into new markets with an instant presence.
An independent mortgage banking firm serving the North Carolina area for nearly two decades, Cunningham & Company understood that shifting from best efforts execution to mandatory delivery was key to increasing its revenue and helping to facilitate growth. In 2006, the firm was averaging approximately 150 loans per month in its origination pipeline and had performed the occasional mandatory execution, but lacked the internal resources and expertise to properly manage the hedging strategy necessary to make an overall shift from best efforts.
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