Through the pandemic, Americans went on a homebuying spree.
Amidst trends accelerated by work-from-home and pandemic isolation, families, some of which were first-time home buyers, drew on an already limited supply.
In light of supply chokepoints and robust demand, home prices rose and, with it, so did inflation. Consequently, to maintain stable prices, the Federal Reserve, through higher interest rates and quantitative tightening, is creating a dynamic that's increasing the cost for consumers to borrow.
Presently, rates on 30-year loans are peaking at over 5.0%. As the Fed continues to raise its benchmark interest rates, mortgage rates are expected to follow, and this will ultimately feed into the demand, and impact the frenzied seller's market seen over the past year.
Mo Salamey of Dearborn, Michigan-based Clover Mortgage caught up with Benzinga to discuss his story and how they’re helping consumers navigate housing market volatility.
The Very Early Days: Salamey’s foray into mortgage lending was sparked through his relationship with leaders in the space, Benzinga was told.
“I’ve been really good friends with Mat Ishbia, who is the president and CEO of Michigan-based United Wholesale Mortgage Holdings (NYSE:UWMC), on a personal level.”
“He recommended it to me,” he said, adding that having exposure to mortgage lending, in addition to existing interests in real estate, seemed “organic” and “natural.”
Emphasis On Different: Agents expressed to Salamey that their biggest problem with loan officers was getting them on the phone in times of trouble.
His solution was unparalleled communication and follow-through.
“A couple of my broker friends who have offices were gracious enough to allow me space within their offices to work with their real estate agents,” Salamey said about how important it was to be on the front lines when starting the business.
“I eventually partnered with many real estate agents. I invested the money we made into nurturing those relations which played into our compensation and, ultimately, our low rates.”
Also Read: Housing Beat: Mortgage Rates Keep Climbing As Inventory Levels Slowly Expand
Scaling As A Broker: At its core, unlike a lender who loans directly, Clover is a broker or intermediary who matches borrowers and mortgage lenders.
According to a Benzinga conversation with Ishbia, “the cheapest way to get a mortgage is through a broker. It's lower rates and fees.”
That remains true, Salamey said, adding he’s tapped into UWM’s education, technology, customer service, and events to grow faster in an industry that’s saturated with players not doing enough for customers.
“UWM is one of the companies doing the most to take the broker channel to the next level. Their systems like BOLT, which speeds approvals, and events like UWM LIVE, which hosted speakers like Tony Robbins, provide us the confidence to add more value, efficiently.”
Navigating Headwinds: Clover made it a priority to reach for higher-hanging fruits. During the pandemic, with rates dropping and home values mostly steady, refinances were a large part of mortgage lenders’ business.
“We made a priority for purchases and our contacts, first. Because of this, we gained even more relationships which have bolstered our business now after the pandemic, as rates are rising.”
Salamey says that due to Clover’s proactivity and forward-thinking, they’re in a position to continue growing despite the refinancing slowdown and higher rates.
“That means more people get access to lower-cost mortgages. That’s a win for us and a win for the client,” he said.
Birmingham, Michigan-based Spartan Wealth president, and CEO Brian Mosallam added, “Mo and Clover Mortgage have provided tremendous value for our clients. His meticulous attention to detail, constant communication, and deliverables are second to none. I would highly recommend Clover’s services and body of work, as we have entrusted him with our clients.”
From Start To Finish: Mortgages with Clover can be as “hands-on or faceless” as customers want.
Simply, if interested in a home, fill out an application. Then, using systems provided by partners like UWM, customers know, in minutes, whether they qualify.
For trickier cases, the Clover team will look beyond the traditional financial documents required for approvals.
“We had a builder of large supermarkets take big losses as he was building his business. Notwithstanding, his bank deposits were extraordinarily large. We were able to qualify him for a multimillion-dollar mortgage using the bank statement program.”
The Key Takeaway: “Mo’s dedication to detail is second to none,” UWM’s Ishbia said in a quote to Benzinga. “It’s no surprise seeing his company, Clover Mortgage, ascend so quickly becoming one of the best mortgage brokers in the country.”
