Charles Dickens opens his novel about the difficult period just prior to the French Revolution with the following famous words: “It was the best of times; it was the worst of times.” In 2007 in the mortgage industry, the quote that seemed more appropriate would have been: “It was the worst of times … really, it was the worst of times!” But then there is the example of Maverick Funding Corporation, a Parsippany, N.J.-based multi-channel lender which was founded just as the mortgage and housing crisis was emerging.
Against seemingly overwhelming odds, Maverick Funding has grown from a 10-person, locally-focused lending organization into a diversified lender with more than 300 employees, operating in 30-plus states. This success is due to the courage and vision exhibited by Maverick during arguably the most challenging period in the industry’s history. It is for this reason that they have been selected as National Mortgage Professional Magazine’s November 2013 Legend of Lending.
I recently had a chance to speak with Maverick CEO Ralph Vitiello, President Mike Petruccelli, and National Wholesale Director Reno Heine about Maverick’s remarkable journey. What emerges from the dialogue recorded below is the story of a firm with a keen eye for spotting unmet opportunities in the mortgage industry, whose leaders possessed the intestinal fortitude, and a strategic vision to guide their rise to the top ranks in the industry.
The year 2007 was an interesting year to start a mortgage company. What led to its formation?
Ralph Vitiello: The year 2007 was not only an interesting year, but also a challenging time to start a new business venture … particularly a mortgage company. Our executives’ 30 years of mortgage industry experience allowed us to see the possibility to advance a new venture by developing a strategic plan with a clear mission and objectives. Despite the environment, we saw this as an opportunity to grow a business.
Your firm has witnessed very fast growth...to what do you attribute it?
Mike Petruccelli: We attribute our fast growth to a focus on building and maintaining strong relationships with our direct retail consumers and the wholesale broker community. We have never lost sight of our core values to deliver superior customer service and responsible mortgage products to our customers.
“There is no question that the team of dedicated mortgage professionals we have is a significant reason for the growth of the company.”—Maverick Funding Corporation Chief Executive Officer Ralph Vitiello (pictured right)
Your management team is made up of industry veterans, how has that contributed to your success?
Ralph Vitiello: There is no question that the team of dedicated mortgage professionals we have is a significant reason for the growth of the company. They had a good feel for what was going on in the marketplace, which allowed us to adapt and respond creatively to the circumstances in the market.
Mike Petruccelli: There was a lot of turmoil in the industry when we started, so there was a lot of talent out there—we simply picked the best.
The Maverick Funding Corporation booth at the “Let’s Make A Deal” Tri-State Wholesale Lending Fair: Joseph Conti, AE; Bob Ketler, regional sales manager; Reno Heine, EVP/national wholesale director; Joseph Boiano, regional sales manager; James Dring, AE; and Robert Walker, AE
You have made a big push into the reverse mortgage market, what is it about that market that attracts you?
Mike Petruccelli: We saw this as another opportunity to fill a void that was created by the big banks getting out of the reverse mortgage business. We are believers in the reverse mortgage product. It is often the only product available to assist with cash-flow for lower income home owners over the age of 62. Previously, these borrowers would have been placed in stated products, often creating financial hardship for seniors who often struggled to make payments. This is a lifesaving product for many borrowers.
“We attribute our fast growth to a focus on building and maintaining strong relationships with our direct retail consumers and the wholesale broker community.”—Maverick Funding Corporation President Mike Petruccelli (pictured right)
We believe in the long-term viability of the product, especially with over 10,000 families a day reaching the minimum borrower age of 62. This number is projected to increase to 18,000 families a day by 2020. Senior home equity reached a record-high $3.34 trillion during the second quarter of 2013, according to the latest Reverse Mortgage Market Index. That is too big of a market to ignore.
Ralph Vitiello: Reverse mortgages have been a great product for Maverick. In less than 12 months, we went from start-up to a top 10 retail originator. We are also excited about the synergies our reverse mortgage product brings to our forward wholesale division. We recently created a reverse unit solely focused on educating our forward brokers. This has proved much more successful than anticipated, with a large pipeline already building.
We are very aware of the recent changes to the program: Elimination of the fixed standard product, reduction in PLF's and the impending financial assessment. While creating a difficult short-term business environment, these changes will put the HECM program on very stable ground in the long run.
We have been able to acquire seasoned veterans when other firms such as Wells Fargo and Met Life, for example, exited the reverse business. The opportunity presented itself and we took advantage of it.
“Brokers can control their own businesses and best meet the needs of consumers for personal service and maximum choice and value.”—Maverick Funding Corporation EVP/National Wholesale Director Reno Heine
You are also active in the wholesale market, how will you adapt to the coming regulatory changes?
Mike Petruccelli: We are instituting two strategies in response to the three percent cap. First, we will be opening a mini-correspondent channel for those brokers who have the net worth to get their banking license. It is our belief that this regulatory change is not going to have as great an impact as many had initially thought.
Ralph Vitiello: We will also be facilitating warehouse lines for those participating in the mini-correspondent program. We are working with our existing warehouse lenders to facilitate lines of credit in the $2-$5 million range.
Reno Heine: Some look at the wholesale broker channel and see a declining market … we look at wholesale in the exact opposite way. It is going to re-emerge as the model that entrepreneurial mortgage professionals prefer. Brokers can control their own businesses and best meet the needs of consumers for personal service and maximum choice and value.
You also are seeking to grow your retail branch network at this time. Why?
Mike Petruccelli: It goes back to seeing and capitalizing on opportunities. We believe that there is a great deal of opportunity with small brokers who don’t have the net worth to become mini-correspondents. We believe that many of them would make excellent branches for Maverick Funding Corporation.
Ralph Vitiello: We are actively seeking branch opportunities with brokers who no longer want the regulatory and compliance headaches and responsibilities. We are seeking teams that are purchase-oriented and have a book of purchase business. We have an existing platform that they can plug into and become successful immediately.
You recently received approval as a Ginnie Mae lender. How will that impact your firm?
Ralph Vitiello: Maverick Funding Corporation is proud to announce its latest achievement in the mortgage industry—approval as a Ginnie Mae lender. This news catapults us into the group of leading lenders that can meet the needs of low and moderate-income households across America.
Mike Petruccelli: Ginnie Mae approval enables us to price much more competitively across our channels. It also allows us to underwrite to FHA guidelines without overlays to deal with.
You just opened a new operations center, what is the significance of that for the firm?
Mike Petruccelli: With a newly-opened 18,000-square foot operating center in Fort Mill, S.C., Maverick employees will be able to service our geographically-expanding client base. The opening of the new center comes at pivotal time in conjunction with the Ginnie Mae approval. With the rapid growth of the company in the Southeastern region of the country, the expansion allows us to meet the requirements required by the strategic initiatives in our business plan. The center is fully staffed with enthusiastic and fully trained employees who are excited to assist those attracted to our diversified platform.
You are very involved in charitable work?
Ralph Vitiello: Maverick Funding believes strongly in supporting our communities by getting involved in many charitable activities. We have been blessed with a growing business for six-plus years, and we feel it is our obligation and duty as a community-oriented business to give back. Giving back to the community is embedded in our philosophy. We also believe that donating our time, talent and resources is equally important as the money we give. Our team members give significant time volunteering in their communities every year.
Where do you see Maverick Funding five years from now?
Ralph Vitiello: Many times, we think only about what we need to do to overcome the challenges of starting up a business. We fail to think of what will be needed to successfully keep it going—profitably for the long term. In my view, building a business should be about striving to make the organization we setup sustainable. Sustainability is what will ensure a business started up today can endure weeks, months or years of struggles till it eventually becomes what many (who are often unaware of the prolonged periods of struggle endured) call an "overnight-sensation.” We believe with the strategic vision, strong team and adaptability to the changing economic environment, Maverick Funding will continue to be a force in the mortgage industry.
Mike Petruccelli: In five years' time, we would like see the business expanding in all channels: Retail, wholesale and correspondent. We will build our reverse business. We also see potential in new areas, like non-agency products. Overall, our goal is to continue to serve customers and grow our brand name as the “Big Bank Alternative.”
Maverick Funding Corporation saw opportunity in 2007. A few years later it saw an additional opportunity in reverse mortgages. Currently, they see the opportunity to build a correspondent business along with their retail branch network. They have put their money where their vision is by investing in a major new operations center. In the future, they expect to be a leader in non-QM, non-agency origination as well. With this type of track record of recognizing, seizing and capitalizing on mortgage industry opportunities, continued success for Maverick Funding Corporation seems like a safe bet. As opportunities continue to knock, Maverick will continue to answer the door.
Congratulations to Maverick Funding Corporation, National Mortgage Professional Magazine’s Legend of Lending.
David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail [email protected]