has announced that it will be providing Plaza Home Mortgage
with a comprehensive risk management program, helping to protect the company from underwriting errors, fraud and other loan manufacturing defects. Plaza has been able to successfully grow its business by sharing the benefit of this program with its correspondent lenders, including Peoples Mortgage
Peoples Mortgage has offered home buyers competitive real estate financing and personalized customer service since 1998. Over the last nine years, Peoples has grown from 30 to 520 employees and is active in 33 states.
“Based on our own calculations, we gain a value of more than 10 basis points (bps) per loan/per transaction with the Plaza relationship,” said Shawn Morris, Managing Partner, Peoples Mortgage. “When you factor in the cost of potential defects along with the savings on the deductible, the calculation was simple.”
Through Plaza’s relationship with CastleLine, Peoples was recently able to:
►Save a total of $65,000 on one loan. Instead of incurring a $70,000 loss, the company only had to pay a small insurance deductible of $5,000 plus premium over par. As a member of the Lenders One cooperative, Peoples also benefited from a lowered deductible.
►Expand its volume of business and realize potential savings through this new strategic approach.
►Realize the value of Plaza’s offering and determine that investors could no longer be weighed solely on price, efficiency and ease when selling on the secondary market.
“In today’s competitive market, it is challenging to differentiate yourself from your peers,” said Mike Fontaine, Executive Vice President and Chief Financial Officer, Plaza Home Mortgage. “Through the CastleLine Certified Loan Program, we are able to basically eliminate representation and warranty risk for our customers, a real benefit. Peoples is a great example of a lender that has captured this benefit.”
Justin Vedder, Executive Vice President, CastleLine, said, “Protecting and increasing company value is a primary goal for a lender. With the Plaza program which helps to mitigate representation and warranty risk, lenders should be able to reduce loss exposure and in turn increase their organizational value. Peoples is a company that has captured this value and is able to quantify it.”