Remaining bullish on Richmond despite a slowing residential mortgage market, the local branch of a Maryland-based lender is all settled into a new home of its own in the Fan.
NFM Lending, whose Richmond-area operations are led by Ben Burkett and Greg Cowart, recently completed the opening of its office at 1127 W. Main St.
Burkett and Cowart, both veterans of the local mortgage industry, bought the building in December before renovating it for their two teams totaling 20 employees.
The duo technically each run their own branch and teams but share the building and overlapping costs. They paid $775,000 for the building and adjacent parking lot, according to city records. The property was previously owned by the Eck family, which sold their massive Fan real estate portfolio last year.
Burkett said he and Cowart decided to make the move into the 3,600-square-foot building after their lease at 1512 Willow Lawn Drive ended in January.
“Coronavirus made us realize we didn’t need as much space as we had,” Burkett said.
Burkett said his team moved into the building in March. Cowart’s group had to wait for a previous tenant’s lease to run its course before finishing renovations and moving in in recent weeks.
The 110-year-old building has over the years been used for residences, offices and a restaurant, Burkett said.
“I’m sure there’s a ghost or two in there,” Burkett said jokingly. “And trust me, when I’m here by myself I’m listening.”
He said he and Cowart met about six years ago and joined forces at NFM. Burkett, 49, previously worked for what’s now Capital City Home Loan and Benchmark Mortgage. Cowart, 50, was previously with NVR Mortgage, Movement Mortgage and First Heritage Mortgage.
Burkett said like all mortgage lenders at the moment, loan volume is on the decline in the face of rapidly rising interest rates and talk of a recession.
“Volume is definitely down, about 65-70 percent of what it was at the height last year,” Burkett said.
He said a big part of that drop is the evaporation of mortgage refinancing, which has dried up almost completely in recent months.
“That wave is gone,” Burkett said.
But that all doesn’t mean Richmonders have stopped buying houses altogether.
“It’s always been good in Richmond and we’ve been fortunate to build a good business and have great relationships. Rates go up and down but people always buy houses,” Burkett said.
And he said Richmond continues to attract buyers looking to move to the region from more expensive areas, a trend that accelerated since the pandemic began.
“Richmond represents a reasonable cost of living. Probably 25-30 percent of all the loans I do are borrowers relocating from outside of Virginia,” he said.
Burkett said interest rates at the moment stand at around 7.25 percent for a 30-year mortgage. He said while that number may be giving borrowers pause, he thinks the rapid rise in rates has instilled more fear than the actual rates themselves.
“I think it’s not where the rates are, it’s how fast we’ve gotten there. It’s kind of like a firework. There’s a bang and it’ll start to settle once the economy softens,” he said, adding that he’s already feeling some softening.
NFM was founded in Baltimore in 1998 by David Silverman. The company now has 98 branches nationwide. It’s what’s referred to as a correspondent lender, meaning it is not affiliated with a bank but originates and funds the loans itself before selling them off to the secondary market. Burkett said NFM’s mortgage volume was upward of $10 billion last year.
Burkett wouldn’t comment on specific loan volume figures for the local operations but said his team and Cowart’s combined helped more than 700 families with a mortgage in 2021. He expects that number this year will be in the 450-500 range.
Burkett said his and Cowart’s branches are the only two NFM outposts based in the Richmond region. There’s also one in Charlottesville and a team in Northern Virginia.
With the industry in flux, many lenders are laying off employees in line with the reduction in volume. Burkett said NFM has trimmed its headcount at the corporate level, mainly in underwriting and closing, but that he and Cowart have not had to make any cuts locally to date.
In addition to putting down roots and owning their own building, Burkett said they hope the new office in the Fan will help give them an edge in recruiting local talent, as the tumultuous market represents a ripe time to poach employees from competitors.
“When there’s not a lot in the loan originator’s pipeline, that’s when they start to look around and say, ‘Is this the place I want to be?’ he said. “This change for the next 12-18 months is going to give people the opportunity to reevaluate where they are and whether it’s time for a change.”