Chasing Prosperity, Or Just Really, Really Desperate For New Leads?

Howard-Mooney says that her role at TMC is to help TMC’s partners — small to midsize independent mortgage lenders, depository banks, and credit unions — facilitate conversations and create mini networks with each other. “We focus on smaller companies because they may not have the resources that larger lenders have,” she explained. “We have about 300 partners and offer a ton of resources to help them grow independently and with each other.”

Howard-Mooney explained that these resources range from role-based focus groups to collaboration labs, which consist of like-type organizations — such as community banks that are similar sized and non-competing — to discuss healthy business strategies. “Usually about six to 12 lenders are in a group, and we facilitate day-and-a-half forums for them to discuss whichever questions or concerns they have about their businesses,” she said. “We collect data upfront to make sure that lenders are getting what they need and want out of the labs.”

Howard-Mooney hosts the capital markets role-based group, which consists of one 45-minute call monthly for those in similar roles to discuss navigating the workplace and the industry.

Organic Connections

Howard-Mooney says that there’s a reason that TMC has a high retention rate of lenders. “We have resources besides the focus groups,” she elaborated. “We have TMCU which is our educational arm of the business, it’s basically customized training for lenders. We also offer an Ask TMC chat forum in which lenders can ask us questions in a Reddit-style format, and we have a program called TMC Connect which is an educational platform that offers web broadcasts, podcasts, etc.”

Watch it on The Interest: Together We Build

And these aren’t just TMC employees droning on about trivial advice. Erin Dee from LoanPeople and Jodi Hall from Nationwide Mortgage Bankers are two mortgage industry talking heads who have contributed to TMC Connect.

But TMC’s hidden bread and butter is the ventures that TMC’s lenders get out of the program. “[Collaborations] happen organically,” Howard-Mooney said. “We don’t get involved or facilitate those conversations. But we’ve seen companies within our partner network merge together. TMC is all about establishing a comfort level and exploring similarities in company cultures.”

One of TMC’s partners, New American Funding (NAF), recently decided to take the plunge into the joint ventures (JVs) realm. Jeffrey Kvalevog, who is chief strategy officer at NAF, says that this is the first time that the lender has stepped into the JV space. “This was really pushed by our CEOs, Patty and Rick Arvielo,” Kvalevog explained. “They said that we ought to get ourselves out there. On the surface, it’s more funded loans, access to clients, and market share, and you don’t have to spend millions of dollars on marketing.”

Kvalevog says that the first step to venturing into the JV space was making the strategic decision of hiring Al Miller in December. Miller, who is experienced in the area of strategic partnerships, helped both NewRez Financial Services and Citi Group with their partnership channels. “Al is the smartest person in the room, and he’s really helped to facilitate NAF’s entrance to JVs,” Kvalevog said.

Seizing the Opportunity

Kvalevog says that NAF is entering the JV space at an odd time: companies aren’t investing or growing that much right now or diversifying their products, and some are folding altogether. Plus, Kvalevog says that JVs consist of putting a lot of money in to ultimately just split the profits. “You don’t get into JVs because you’re going to make a bunch of money. In fact, it’s traditionally a 50/50 split so you’re giving half of that profit away,” he explained. “The reason why you do it is to grow your organization long-term, and the partnerships that [NAF is] looking for are in areas that we’re lacking or that are good partners to associate with.”

Kvalevog also explained that most traditional JVs come from two main audiences: real estate brokerages and builders. “Both of those audiences are front and center with their clients,” he explained. “So as NAF looks to enter a venture, we’re looking for trusted lenders to get both of us front and center with customers. It’s not just about getting money or customers, either. We have a lot of conversations with companies and we have to consider whether they align with NAF’s values or not.”

Is Now a Perfect Time?

For Lenders One, a self-described mortgage cooperative, hard times are some of the best times for mortgage lenders to join an environment that promotes partnership. Justin Demola, president of Lenders One, says that as a mortgage alliance group, his company offers programs that give partners discounts and other incentives to help them compete with larger companies, especially in a market downturn. And membership is heavy despite the odds. “At any given time we have between 230 and 250 different banks, credit unions, and IMBs,” Demola said. “What we do for them is pull their aggregate volume to negotiate better terms for them on the products and services side. So we offer reseller products and services to manufacture loans and since we’re a larger cooperative, we can offer special prices.”

Like TMC, Lenders One offers continuing education programs to ambitious LOs looking to expand their credentials. While Demola says that Lenders One isn’t a joint venture by any means, he, like Howard-Mooney, finds that the lenders he works with often merge businesses — especially in downturns. “The M&A internally is valuable because everyone wants to do business with people they like and trust,” Demola said. “Even if people want to explore a collaboration, they’re more likely to approach a strong connection from Lenders One since the trust and networking are already there.”