R.J. Kistka serves as chief lending officer at First National Bank of America (FBNA), headquartered in East Lansing, Mich. In this edition of National Mortgage Professional
magazine, Kistka describes his work in the mortgage field, including his focus on the non-QM and non-conforming loan environment, and offers his observations on the state of the industry.
How did you first get involved with the mortgage profession? Was this your original career choice?
R.J. Kistka: While attending Grand Valley State University in Grand Rapids, Mich., I was a finance major and I had a job in the restaurant industry. In 1992, I met Katy and Patricia Wolfston of AAA Mortgage and Finance at the restaurant and began talking with them. They wanted me to work for them. I was there from 1992-1998. I liked the financial aspect, but I also liked originating loans. I thought it was a pretty cool thing to help people buy houses.
What was the path that led you to the First National Bank of America (FNBA)?
R.J. Kistka: In 1998, AAA Mortgage and Finance closed and I started my own mortgage company. I had it until 2014, when I sold the company. I worked for the company that bought it for two-and-a-half years, and then I started talking to First National Bank of America about building their mortgage group. I had done business with them for 20 years and knew their operations and organization. I felt I could do what I did before on a larger scale. FNBA had a stellar reputation and the resources to support such growth.
What makes FNBA stand out from its competition?
R.J. Kistka: We focus on portfolio. We don’t do any conforming loans. Portfolio is 100 percent of what we lend, and we’ve been doing that since 1955. We do jumbos, we cater to the self-employed, and we do a lot of non-QM lending. This gives us the ability to create programs that others simply cannot offer. We are in all 50 states and have both retail and wholesale, and correspondent volume.
How strong are the loans in your portfolio?
R.J. Kistka: Over our entire residential portfolio, we are regularly lower in delinquencies than the conforming market. We’re very good at vetting the borrowers–they have a lot of reserves, the ability to repay and good downpayment.
Where do you see non-QM lending heading over the course of the next 12 months?
R.J. Kistka: I see more growth. I don’t see anything getting in the way. We’ve grown that business from $100 million to $1 billion in the three years that I have been with the bank.
What are some of the challenges facing the markets where FNBA is lending?
R.J. Kistka: The biggest challenge is market awareness. We lend in all 50 states, so having to develop a brand nationwide can be difficult. Also, many consumers are unaware that non-QM lending exists. Bringing positive education across 50 states is taxing, but rewarding as well.
How does your company respond to online reviews–both positive and negative–of your services?
R.J. Kistka: We respond to all online reviews. Fortunately, we make service a priority–if not the main priority–and most of our reviews are positive. We do receive negative reviews, which we always work to resolve.
How do you view the overall state of today’s mortgage industry? Where do you see the industry heading over the next 12 months.
R.J. Kistka: The overall state of the mortgage industry is strong. Rate and market sensitivity will be key indicators of the success of many of the players.
If you have a strong purchase business–ours is at 88 percent–you will be fine. I think people who rely on refi business live and die by small market fluctuations or rates.
Lately, there have been some jitters over the potential for a recession. Do you see a recession on the horizon? How will today’s housing market respond to a recession.
R.J. Kistka: If we run into a recession, I am not as concerned with decreasing housing values as we all experienced in 2008-2011. I believe they won’t appreciate as fast, but as far as falling values, I don’t see it.
There is limited inventory and construction business has not met demand. In 2008 and prior to that, everyone was a builder and the sea of homes built was endless. We simply don’t have that issue today.
In your professional opinion, what can be done to bring more young people into mortgage careers?
R.J. Kistka: Education is key to bringing younger people into the business. We have to do a better job of training new people. This is a fantastic industry if you manage it properly, and part of managing your business is succession planning. That requires young minds and new talent, being trained for important jobs in our field.
Looking back on your career, what do you see as your peak accomplishment?
R.J. Kistka: My biggest accomplishment was surviving the recession. We were smart and saved our money. I also am proud to have worked with some of the greatest mentors in the business. Joe Garrett, for one, was instrumental in showing me how to run a company from a financial perspective, not a volume perspective. We measured everything in basis points. Also, learning the importance of recruiting the best–not the most experienced–talent is crucial. I owe that education to Pat Sherlock, founder and president of QFS Sales Solutions.
How do you spend your leisure hours?
R.J. Kistka: My leisure hours are spent with my wife and children. We are either skiing or boating. We have a very active lifestyle and also enjoy traveling.
