CFBank Getting Out of Consumer-Direct Mortgage Lending Business


CFBank, the wholly owned banking subsidiary of CF Bankshares Inc., is ceasing its direct-to-consumer (DTC) mortgage lending activities and instead focusing on retail loan originations.

The company says it has suspended the origination of new rate-lock commitments through its DTC mortgage lending business effective as of June 30 and will work toward closing out its existing loan pipeline and commitments in the next few months.

CFBank’s decision to wind down its DTC mortgage lending business resulted from changing market conditions during 2021, as the residential mortgage market has experienced price volatility, diminished refinance volumes, margin compression and increased market competition, among other factors, which have led to a challenging environment, the company says. Market conditions resulted in CFBank incurring increased early payoff (EPO) fee expense during 2021, as the number of borrowers paying off loans during the first six months following origination has increased significantly.

Furthermore, decreases in DTC mortgage origination and associated revenue during the second quarter, coupled with the increased EPO expense, are expected to result in an after-tax loss for the DTC mortgage lending business.

“CFBank opportunistically entered the DTC mortgage lending business in 2018, and we have benefitted from this timely business decision,” explains Timothy T. O’Dell, president and CEO. “The DTC mortgage lending business has been a significant driver of fee income for CFBank over the past two years, and the fee income generated from this business has allowed CFBank to invest in expanding its footprint and presence, along with building capital.”

CFBank says it will work to grow and expand its commercial and retail banking activities, along with retail mortgage lending.

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