With interest rates at record lows, lenders had to rely on staff and technology put in place pre-pandemic to manage a surge in purchase and refinance applications.

When the economy began to close down a year ago, the mortgage industry faced questions about how the pandemic would affect lending. But as interest rates continued to drop in 2020, lenders soon found that consumers looking to refinance their homes would keep the industry busy.

“Not surprisingly, we had the best year that we’ve ever had at American Eagle for real estate production,” said Howard Brady, chief lending officer at American Eagle Financial Credit Union. “It was just incredible – how to really make something good out of something that’s really challenging on a lot of levels.”

To keep up with the activity, technology and staff were keys for lenders to manage volumes during the pandemic.

Historically low interest rates drove the refinance activity as rates continued to drop throughout the year. January 2020 began with already low rates, with the average on a 30-year, fixed-rate mortgage at 3.72 percent and 3.16 percent on a 15-year, fixed-rate loan. By the end of December, the average on a 30-year, fixed-rate mortgage had fallen to 2.67 percent, and on a 15-year, fixed-rate loan, it was 2.17 percent.

Lenders saw refinance activity in Connecticut double in 2020 compared to 2019, with more than $26.25 billion in residential refinancing, according to The Warren Group, publisher of The Commercial Record. The number of loans originated in the state rose by 74 percent compared to 2019 to more than 89,000 loans.

Which banks, mortgage companies and credit unions did the most business in 2020? Click here to see the full rankings.

Every year, The Warren Group compiles the top 10 mortgage lenders among Connecticut’s credit unions, banks and mortgage companies, ranked by number of loans and loan volume in several origination categories. All loans were originated in 2020.

Quicken Loans led 2020 with $1.66 billion in refinancing volume for residential properties. The mortgage company originated the most residential refinance loans with more than 6,300.

East Hartford-based American Eagle Financial Credit Union had the most refinance activity among credit unions with nearly $272.76 million in volume and more than 1,800 loans.

Bank of America had the highest residential refinancing volume in Connecticut among banks, with $1.16 billion. Waterbury-based Webster Bank had the most activity among banks in 2020, with more than 3,400 loans. Webster’s refinance volume in Connecticut was $739.62 million.

Staff, Process and Technology

Customers looking to refinance their homes mostly fell into three categories, said Amy Jakobeit, Webster Bank’s senior vice president and director of mortgage and consumer lending. They wanted to consolidate debt, use cash-out refinancing to pay for home improvements rather than trying to sell and buy a home in a competitive market, or take advantage as repeat customers of the low-rate environment to get the most competitive rate for their mortgage.

Along with mortgage activity, the start of the pandemic saw many banks, like Webster, working on the Paycheck Protection Program, all while employees had to adjust to working remotely. Jakobeit said in an email to The Commercial Record that the team shifted quickly and maintained high standards when serving customers.

“Webster bankers are known for their commitment to providing the highest standards of service to our customers,” Jakobeit said. She added: “In a short period of time at the outset of the pandemic, we ensured that our loan team had the necessary resources to perform their job from home and continue serving our customers.”

For Webster, which more than doubled its loan volume in 2020 compared to 2019, technology and process improvements were also key to managing the loan process.

“Our investment in process improvements over the past couple of years was instrumental while managing through the pandemic,” Matt Cammarota, Webster’s group senior vice president and director of consumer and business credit, said in an email. “We were able to keep our end-to-end cycle time from application to closing below the [Mortgage Bankers Association] average of peer banks in the first half of 2020.”

Technology investments made before the pandemic also helped American Eagle FCU manage its volumes. American Eagle kept its cycle time to about four weeks, Patty Mason, vice president of real estate lending, said in a joint interview with Brady. The credit union used new loan origination software from Encompass, which created efficiencies in the process and integrated with the existing front-end member portal, Mason said.

As loan volumes increased, the process of getting all of the pieces needed before sending loan disclosures created a bottleneck at first, Mason said. She added that the staff worked to adjust to handling the activity. Getting members to agree to receive disclosures electronically rather than by mail was just one step that helped the credit union make the process more efficient, she said, and employees were asked to continue to think of other possible improvements.

Brady added that American Eagle considers the mortgage process one that should continue to be enhanced. He said the credit union has two teams – an enterprise-level member experience group and a lending quality team – that work on improving the process.

While American Eagle’s lending team had a couple of staffing changes, the credit union managed the 2020 volumes without bringing on additional staff.

“We did what we did with the folks that we have here, which was a true testament to that team,” Mason said. “They worked really hard to deliver the best service in a tough environment and keep [cycle] time down. We asked a lot of them, and they rose to the challenge.”

Activity Continues

Even though rates started to increase, American Eagle has seen already seen high levels of mortgage activity in 2021.

“The storyline continues to unfold with volume,” Mason said. “This has been a long year, and there’s no slowdown in sight.”

Brady said the volumes could remain high this year, adding that the credit union’s leadership recognizes that more staff might be needed to support employees. But recruiting people could be challenging.

“If we went to the market today, the question that we would have to answer is ‘How do we find the talent?’” Brady said. “Everybody’s looking for talent right this second, so that’s really the nuance within the conversation, because we’re very selective in who we bring into American Eagle, and rightfully so.”

Webster Bank also expects mortgage activity to remain strong this year.

“We began 2021 with a healthy loan pipeline and expect that to continue through the spring buying season with high demand for both new home loans and robust home refinance applications due to the continuing low-interest rate environment,” Jakobeit said.

Staff and Technology Key to Record Loan Volumes in 2020

by Diane McLaughlin time to read: 4 min