Arkansas Lender Exits Secondary Market
December 26, 2017
Bank of the Ozarks in Little Rock, Ark., is exiting the secondary market, complaining that this aspect of its operations had "operated at essentially break-even."
According to an Arkansas Business report, the bank will continue to originate some home loans through its Community Reinvestment Act mortgage lending group and its community bank group. The bank said that two of its mortgage bankers, Gene Holman and George Schaefer, "will continue to run the other business functions they have historically overseen," and least seven "potentially displaced" employees also accepted other positions in the bank.
"No offices will be closing, since all offices in which mortgage lenders are housed provide other products and services to customers," said bank spokesperson Susan Blair. "Some mortgage personnel will be displaced, but we hope that many, hopefully the majority, will apply for and transfer to other open positions in the bank."
Blaid added that the bank’s decision to cease secondary market operations was based on a regulatory environment that made residential mortgage origination "challenging from a profitability perspective."
"All secondary market loans we have originated have been resold shortly after origination, so this decision will have no noticeable impact on our balance sheet," Blair said. "Our secondary market mortgage loan program has operated at essentially break-even, so this change will have no meaningful impact on our profitability. Since the Great Recession, regulatory requirements for mortgage lending such as QM, TRID and HMDA have constantly increased making it more difficult and more expensive to originate these loans, all resulting in this business being challenging from a profitability perspective."
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