Real Talk Ken edwards Buyers turn to specialty non-bank lenders for mortgage loans

September 17, 2018

Only 10 properties sold last week, half the previous week’s total. With a dollar volume of only $22 million, the fall market has arrived early, ahead of the calendar’s timeline.

All 10 properties in the list were single-family homes, with Greenwich, Old Greenwich, Riverside and Cos Cob represented. My buy of the week selection is a newly constructed home near the Montgomery Pinetum. It showed very well but took six months to go to contract to a lucky buyer who got a good deal on it.

My sale of the week selection is a downtown luxury home on Milbank Avenue that is worthy of being a home designer’s classroom if ever I saw one. It, too, took six months to find a buyer but it closed at $4.1 million, $105,000 higher than its reduced asking price.

Buy of the week

Listed for $3.4 million in February, this newly constructed center hall colonial was built along with a companion home on what’s known as Pinetum Trail. It’s across from the 125-acre Montgomery Pinetum and Park which, if you haven’t visited them yet, should be moved to the top of your list. They are publicly owned and described in one Facebook holder’s account as a “5-star childhood paradise. We were blessed to grow up with the Pinetum for a backyard. The bridle paths, ice skating, and sleep outs!”

The six-bedroom, five-and-a-two-half bath make this a great large family home choice with more than 7,000 square feet of finished space. Set on 1.12 level acres, it has plenty of yard space for outdoor family activities including a pool site if that’s what floats your boat.

At 82 percent of original asking, which is an unusually large discount on new construction, this sale was my buy of the week selection.

Sale of the week

My sale of the week selection was a luxury three-bedroom, three-and-two-half bath “European style” downtown Greenwich home on Milbank Avenue.

The home features special features including a motorized turntable that can rotate your car to face the garage doors to exit, a beautiful swimming pool and an engineered storm water management system. In this day of hurricanes and Nor’easters that occasionally hit us, this is a feature that may have great utility.

Non-banks pass banks in mortgage loans

In what may come as a surprise to you, according to a Sept. 6 article in the Wall Street Journal, banks are now collectively in second place for mortgage loan originations. Many buyers are now choosing to finance their home purchase with specialty non-bank lenders, like Quicken Loans which is now in third place on the list. In fact, a lender you may not know, Freedom Mortgage originated $51.1 billion in home loans last year, exceeding Citibank and Bank of America in mortgage dollar value.

This is a byproduct of the “good times” in the economy and specifically the boom in real estate slowly emerging after the 2007-2008 crash. Banks have pulled away from the traditional mortgage market, focusing instead on consumers with good credit. Meanwhile the non-bank lenders are targeting first-time buyers and moderate-income buyers. If you’re in one of these two groups, you might do well to engage them in your home purchase.

Here are the top mortgage lenders, sequenced by the number of originations, for the first half of 2018 along with bank ranking by asset size in parentheses (for those that are banks):

1. Wells Fargo (4)

2. JPMorgan Chase (1)

3. Quicken Loans

4. PennyMac

5. Bank of America (2)

6. U.S. Bank (7)

7. Caliber

8. United Wholesale

9. Amerihome

10. loanDepot

11. Freedom Mortgage

This Week’s Success Quote

As I write this on September 11th with the ceremonies at the World Trade Center playing in the background I’m inspired by this famous quote from Gandhi.

“Live as if you were going to die tomorrow. Learn as if you were going to live forever.”

— Mahatma Gandhi

Ken Edwards is the principal Broker for Edwards & Associates Real Estate and has lived in town since 1974. All opinions expressed are entirely his own and not those of this publisher. Comments and questions may be sent to K_W_Edwards@ Yahoo.com or call (203) 918-4444.

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