Quicken Loans CEO Says Largest Mortgage Firm Has Record Volume

(Bloomberg) -- Quicken Loans, the largest U.S. mortgage issuer, is processing a record volume of applications even as the coronavirus disrupts the economy and work environment, according to Chief Executive Officer Jay Farner.

“March will be the largest closing month in our company’s history and we imagine April will be even bigger,” Farner said in a telephone interview from his suburban Detroit home, where he is working remotely, like about 98% of Quicken’s 18,000 employees.

Low mortgage rates, driven by government intervention, are spurring borrowers to refinance even as sales slow amid widening orders to stay at home or practice social distancing, Farner said.

The Federal Reserve has pledged to buy unlimited government-guaranteed mortgage-backed securities to ensure the market remains liquid and other agencies, including Fannie Mae and Freddie Mac, have announced forebearance programs for borrowers facing job losses due to the current crisis. Markets jumped Tuesday as Congress moved closer to agreement on a stimulus plan.

“Over the last few weeks, we’ve seen refis increase substantially and we’ve seen purchases dip off a decent amount,” Farner said. He declined to disclose specific percentages for the two categories of loans at Quicken, which originated $145 billion in 2019.

Other comments on today’s situation:

• Loan applications are taking about one or two days more to process because of the dispersion of the workforce and other hurdles, averaging 30 or 31 days, which is still plenty of time for borrowers to close within time limits to lock in current rates at 3.5% to 3.75% for a 30-year mortgage.
• The market for securitizations and the so-called to-be-announced or TBA market are “standing strong” for the types of conforming and government-guaranteed loans Quicken offers, allowing the company to continue processing mortgages.
• Electronic document processing, drive-by appraisals and other adaptations to social distancing orders are allowing deals to be processed in most of the country, where employees in the finance industry are exempt from stay-at-home restrictions.
• The company is doubling its call center workforce from the current 250 employees to field anticipated questions from borrowers about loan forbearance, modifications and other services as job losses mount. It expects to add 200 to 300 additional people in April.

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