Kansas City Business Journal recently published a story about JB Nutter and the problems it has run into due to the credit crunch. The article describes how the 2nd largest wholesale reverse mortgage lender in the country has been forced to stop accepting new files from its wholesale customers until March due to warehouse providers pulling lines.
“Some estimates are that there has been an 80 to 90 percent reduction (in warehouse lines) across the country, which has affected companies like ours that are very healthy and have an opportunity to grow but can’t do as much business as we’d like,” said George Lopez, a vice president of Nutter.
According to the article, the changes do not affect Nutter’s retail business, but its wholesale customers have been forced to look elsewhere. “If you are a broker originating loans for sale to J.B. Nutter, right now you’ve got a problem if you don’t have another source,” said Robert Capps, president of Mid America Mortgage Services of Kansas City Inc. “Most brokers do have other sources, but everyone is beginning to get jammed.”
I’ve talked with several different wholesale executives who said that after JB Nutter’s announcement, they were flooded with new files and customers looking for another outlet.
What’s unclear is if JB Nutter will be able to bring customers back after telling them they need to find a new outlet for a few months. Lopez doesn’t seem too worried. “We’re going to be fine,” he said. “Our volume in 2009 will be much higher than 2008 at the retail level. It’s just that when we resume funding (wholesale reverse mortgage) loans in March, we’re going to have to scale back a bit.”