Nearly three years after it stopped originating loans, Interfirst Mortgage is resuming operations, not just in the wholesale channel but in consumer-direct retail as well.
If anything, the current coronavirus-driven disruption in the mortgage market actually accelerated the company's relaunch plans, said Mark Freedle, its executive vice president of production.
Starting in March,
"So when these things started to emerge a few months ago, we really accelerated our development program so that we'd be able to start taking advantage of the improvements in the market," Freedle said.
In July 2017, Chicago-based Interfirst made the strategic decision to exit the mortgage market due to troubling warning signs, including oversaturation and overvaluation on pricing for both loans and servicing rights in the secondary market.
"Servicing values had just gotten out of whack," he said, adding that he observed many in the industry were making "big bets" on their future worth, "and we just didn't want to play that game.
"So, we said let's hit pause, let's keep our gunpowder dry and there will be a time in the near future — and we didn't know exactly when that would be — that would be a good time to reenter the market," Freedle said.
At that time, the company wound its operations down, but it did keep the corporate entity intact. Sensing a change in the market, late last summer/early fall, Interfirst started to reactivate its dormant licenses, Freedle said.
As it looked to reopen, Interfirst began working to improve its proprietary mortgage broker-facing technology system, in order to create a cloud-based end-to-end experience, he added.
Interfirst is also doing a soft launch of its consumer-direct business, which will be a new line for the company. It's opening a call center staffed with a non-commissioned sales team, which incentivizes them to provide consumers with the most advantageous loan, rather than one that provides the loan officer with higher compensation, Freedle said.
The consumer-direct channel will have its own separate brand when it formally launches, but Freedle declined to name an official date. Retail, he said, will help the company balance out some of the channel market risk.
But wholesale is what Interfirst was good at during its peak years of 2013 and 2014.
"Our emphasis is on the broker community," Freedle said.
The company's secondary market strategy will be best execution. It already had its seller/servicer status recertified by Freddie Mac and expects the same from Fannie Mae in the near future. But it will also sell loans to aggregators if it can get a better price there.
The company is currently licensed in 13 states and working on reactivating the others it had operated in prior to 2017. At that time, it was licensed in 29 states.
Interfirst is just starting to enroll mortgage brokers, reaching out first to the approximate 1,600 that it had worked with prior to the shutdown in the states where it is currently licensed.
The current version of Interfirst
For the relaunch, Interfirst's executive team returned to their previous roles. Besides Freedle, the group includes CEO Dmitry Godin, Chief Financial Officer Ilya Shulman, Chief Operating Officer Karen Gerli and General Counsel & Chief Compliance Officer Clayton Hutchinson.
