PERSON OF THE WEEK: Is now the right time to put a whole bunch of eggs in the homebuilding basket? Envoy Mortgage believes it is. This week, MortgageOrb connected with Suzanne F. Schakett, senior vice president of the company's national builder division, to get a sense of why Envoy is bullish about building.
Q: What was the impetus behind the launch of Envoy's builder division?
Schakett: It really stemmed from the principals at Envoy Mortgage having the vision early last year to get more involved in the budding new construction space – and in a big way.
Envoy doesn't approach the mortgage business half-heartedly, and they were not going to approach partnerships with homebuilders and developers that way either. So the decision was made to have a high-touch, strategic national platform that could provide the very best builder products and services possible to small and large homebuilders alike.
Our focus is on mortgage origination and servicing, so this platform is built to serve the varied mortgage needs of the thousands of homebuilders across the 48 states, plus Washington, D.C., where Envoy has a presence.
The other observation we had was that very few banks or mortgage banks actually have a national builder division any longer, if they ever did. So we believe the timing is right for this new platform. The opportunity to provide all the tools and resources to our originators that have expertise in working with builders, and offer a high level of support to the builders themselves, is valuable and more worthwhile than ever given today's market.
Q: What regions of the country are seeing a particularly significant increase in home building activity?
Schakett: It probably wouldn't surprise anyone that our top volume of mortgage originations for new construction is in states that are lockstep with the top new construction markets in the country, particularly Texas, the Carolinas, California, Georgia and Florida. We are also seeing other MSA and sub-markets that are resurging quite strongly, such as Phoenix; Bend, Ore.; Corpus Christi, Texas; and Colorado Springs, Colo.
Q. What is Envoy doing to encourage ‘green’ building? Are you offering energy-efficient mortgages?
Schakett: Historically, Envoy Mortgage has always had a strong commitment to being a cutting-edge ‘green’ lender, and that is evidenced by the many green industry awards we have won over the years. So it makes sense that our national builder division carries that torch, as well. We believe many of the green builders out there have the right idea, but the mortgage industry as a whole has not been very receptive to the concept of green. Envoy has originators in many of our branches who have expertise in the benefits and nuances of the energy-efficient mortgage.
Now we are beginning to see many of our green builder partners incorporating the benefits of that product into their sales presentation with their customers, in tandem with sharing the specific energy-efficient features in their homes. In addition to providing expertise on existing green mortgage products, our division is working to create a signature Envoy Green Builder program later this year or early next, which will really encourage our green builder partners to stick to the cause and make an impact by connecting the dots of green building and green mortgages throughout their sales campaigns and marketing.
Q: Although the economy is still relatively wobbly and unemployment figures have not decreased substantially, there is growth in home construction. To what do you attribute the rise in construction activity while the economic picture is still cloudy?
Schakett: New home construction in our country is a major economic driver, and it was only a matter of time before we started seeing strong activity and optimism from home builders. It reminds me of a bear coming out of a long hibernation, as the builders dust themselves off, realize they have survived and have a renewed appetite.
As distressed inventory has been declining in most markets across the country, builders are finding that their dirt sales are increasing, and many have very little – if any – inventory to offer.
I believe that even though we don't fully see recovery in some of the employment metrics yet, the demand is definitely being felt in new home communities across the U.S. I talk to homebuilders every day that express they are cautiously optimistic and they are increasing their number of starts over last year. And I think some of the buzz can be attributed to the fact that consumer confidence had been down for so long that a shift is occurring.
After a period of time, I think it is human nature to assume things are looking up because we are so ready for that to be the case. That type of thinking is pretty powerful. So, along with some promising indicators, real momentum is being felt in new construction as a whole.
For information on Envoy Mortgage's national builder division, contact Schakett at (713) 993-4479 or send an email to nbd@envoymortgage.com.
