Nationwide Equities is taking a targeted approach to expansion on the heels of an important milestone: 20 years in the mortgage business.
The company is charting growth through a greater focus on proprietary products and non-QM loans while maintaining its Home Equity Conversion Mortgage presence, says co-founder Glenn Wallace. The focus on new channels will propel the company forward, he says. Even while it diversifies its offerings, it doesn’t plan on straying far from the Home Equity Conversion Mortgage (HECM) space, however.
“Nationwide is not wavering in its commitment to the reverse space but feels it will take a few years for the true effects of the HUD changes to have an impact on the performance of the MMI Fund,” the company said in a press release announcing its anniversary and new business initiatives. “Hopefully, at that time it will modify the program so that more borrowers will qualify. In the meantime, the company plans to keep building its retail platform offering new innovative products and programs and expanding its footprint across the U.S.”
An internal desire and larger company philosophy to have the right products for a growing pool of different audiences is one of the things driving this new expansion effort, according to Wallace.
Expanding forward and non-QM offerings
“We have the philosophy that ‘no loan hits the basket,’” Wallace tells RMD. “A year ago we had six branches, now we have 36. Most of these new branches are geared on the forward side. It hasn’t been easy, but now we have a full product menu: USDA, FHA, jumbos, construction perm loans. So, we had that, then we entered into the non-QM business.”
While much of Nationwide Equities’ new focus is going to be centered on forward mortgage offerings, that doesn’t mean its reputation and place as a reverse mortgage business is going anywhere any time soon. The company wants to stay active in reverse, but observe where the HECM product will land in the wake of many changes the program has endured since late 2017.
“We’ll still be a reverse shop, but our focus is going to be on proprietary,” Wallace shared. “I think focus is important, because unless you’ve got a huge amount of resources to fight wars on multiple fronts, we’re not in that position. We need to focus. So, we’re going to roll that out and walk through the various levels of proprietary.”
In terms of expanding offerings to include non-QM business, which Nationwide started roughly six months ago, the process of getting involved in that area is inherently more complicated, Wallace said. Still, it’s a necessary channel if the company wants to fulfill its aforementioned edict of not allowing any loan to, “hit the basket,” he says.
“A lot of loans, for whatever reason, can’t go the conventional route, but it [still] needs to find a home,” Wallace said. “While non-QM does give alternatives to income verification and down payments, etc., it’s not subprime. People need to understand that. And, they’re not slam dunk deals. Non-QM investors make sure you’ve got all your bases covered. So, they don’t go through as quickly as you would think.”
Lessons learned after 20 years
Coming up on 20 years in business with Nationwide and his 41st year in the business space overall, there is no shortage of lessons Wallace has learned over the course of his career.
“I hate to use cliches, but certainly ‘crawl before you walk, and walk before you run,’” he says. “Make sure you get [the business] down. It’s all about service, but we have a saying here: ‘If you don’t service your customer, someone else will.’ So, it’s very important. We view our branches, our loan officers, as our corporate customers to make sure we can give them what they need.”
In terms of crawling before walking and walking before running, it comes down to mastering individual steps of a process before moving onto the next one, Wallace explains. The offered example illustrates Nationwide’s moves in the proprietary space: beginning as a broker before moving up the ladder to become more fully-featured.
In terms of the biggest learned lessons Nationwide is taking into its expansion efforts, sufficient access to capital and maintaining focus for the business are two of the primary factors. Beyond that, it comes down to building on a reputation of service, and creating loyalty among employees by treating them well.
“We built a good reputation on being able to be aggressive on our underwriting on the reverse side,” he said. “As an employer and good company, treat your people well and they’ll have your back. That’s kind of where we are. It’s not about the last dollar.”
Hearing stories across the mortgage industry about loan officers having their compensation and base pay endure cuts, those kinds of issues undermine the loyalty that LOs could have for their employer, Wallace says.
“Our loan officers are our primary golden goose,” he said. “That’s our front line.”