Special servicer Fay Servicing recently launched a new mortgage origination division that will focus on retail and correspondent loans.
The new division will be headed by Steve Szpytek, who previously held executive positions at numerous mortgage companies, including director of strategic planning at Performance Home Loans; chief operating officer and director of lending at Elderlife Financial Services; chief operating officer and chief lending officer at ECC Capital Corp./Encore Credit; and executive vice president and chief credit officer at New Century Mortgage.
To learn more about the new division, MortgageOrb recently interviewed Ed Fay, CEO of Fay Servicing.
Q: Why launch an origination division at this time?
Fay: As a servicer, it makes sense for us to have an originations group to complement our servicing efforts for our clients. A key driver of the Fay Servicing business model is building an uncommonly strong relationship with the borrower that allows us to better understand the borrower's financial situation. There are times when borrowers would like to refinance their current home or purchase a new home, and based on the trust that we have built with the borrower, many have asked us how we can further help them with a new loan. In addition, as a servicer, from time to time, we have real estate owned (REO) properties that we actively market for the asset owner, so having an originations team as an option to help finance some of these properties is a natural fit.
Q: To whom do you plan to market these loans?
Fay: We assist borrowers we currently service, as well as new borrowers.
Q: What's involved in establishing a new origination division and when it will it officially launch?
Fay: Launching an origination team is a complex undertaking that requires a great deal of focus and resources on legal, compliance, systems, processes and people. Given the origination experience among both Fay Servicing's senior management team and the firm's representatives that speak to their borrowers, originations have always been in Fay Servicing's DNA. It is our rare but distinct credit culture as a servicer and ability to effectively re-underwrite every file to find optimal solutions for borrowers that differentiates us in the sector.
That foundation has made adding the origination platform a natural extension of the business. The firm benefits from many crossover roles in legal/compliance efforts for servicing and originations. That being said, it took a great deal of work and preparation to establish a platform that fit our strategy. As with any mortgage company, the people are the most valuable assets at the firm, and the model originator at Fay Servicing looks much different from the model originator at other firms (particularly refinance-focused shops).
Similar to our servicing business, we place a great deal of value in problem-solving skills. Fay Servicing is originating loans today and has the infrastructure in place to start scaling the division.
Q: What types of products do you plan to offer?
Fay: While we have a full suite of products, we are focusing on the Federal Housing Administration products, which is a good fit for many of the loans we are servicing today.
Q: Would you say it is unusual for a special servicer to go this route in this day and age?
Fay: We can't speak for other special servicers and what is a strategic fit for them, but we do feel that this is the right decision for Fay Servicing. Again, our firm's business model is to foster a powerful relationship with the borrower that will help achieve the optimal loan resolution. Adding our origination platform helps enhance that relationship, and that is what makes this a great fit for us.