MortgageOrigination

How one small lender is navigating the turbulent market

Florida-based ResMac had two rounds of layoffs, is focused on expanding into commercial markets and plans to raise capital

Delray Beach, Florida-based mortgage lender ResMac, Inc., like many others, has trimmed its workforce so its cost structure is in line with reduced origination volume. The company is focused on expanding beyond residential loans amid a price war and surging rates. To grow in the coming years, it seeks to raise capital.

It’s all part of a strategy to not only survive the most challenging mortgage market in decades, but to come out of it stronger. 

ResMac cut 10 staff members across two layoff rounds this year, the second of which occurred on Friday afternoon, affecting mainly the wholesale channel and sales job positions. 

“We are just dealing with the natural process of cost containment, managing our costs through this cycle,” Evan Tullos, chief people officer, said during an interview. “We hand-selected certain areas in the company that we felt that we had to make a decision for the purpose of just cost control.” 

According to Tullos, the company made an arrangement to work on a contract basis with some of the employees that were laid off. In total, ResMac has between 70 and 80 employees, he said.

Founded in 2008, ResMac is a nonbank mortgage lender that originated, on average, $15 million in loans over the last 12 months and has licenses in 31 states, according to the mortgage tech platform Modex.


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“We are experiencing about 15% to 20% reduction in our volume at this time, year-over-year,” Tullos said. “I don’t think there’s any secret that the industry is taking a downturn, and we are equally affected. Everybody’s volume is down.” 

Although ResMac has a retail channel, the company was built on a wholesale model, which has been impacted by aggressive pricing, mainly from the leader United Wholesale Mortgage (UWM). 

Consequently, companies such as loanDepot, Mountain West Financial, AmeriSave and Point Mortgage Corporation announced they exited the wholesale channel to focus on more profitable divisions for their businesses. 

“We’re not the most expensive, and we’re not the least expensive lender. We really pride ourselves on delivering execution and service, really not getting into the price battle, because we’re not a large company with a large balance sheet that can buy down prices and compete on price,” Tullos said.  

Non-QM loans are a big part of ResMac’s business, a product that was hit hard when mortgage rates surged. Lenders struggled to sell in the secondary market legacy lower-rate loans as investors were seeking higher yields, causing the implosion of non-QM lenders First Guaranty Mortgage Corp. and Sprout Mortgage. Others are backing off the product, such as Impac Mortgage Holdings.   

For ResMac, the strategy has been to expand its offerings, mainly focusing on the expansion into some commercial markets, according to Tullos. 

Capital, however, will be necessary to grow. “We are going through some capital raising. We’re doing some presentations with investors in the business and various interested parties that are looking for somewhere to invest in this industry specifically.” 

According to Tullos, the capital raise may not conclude in 2022, but the company is profitable and well-capitalized. ResMac’s ambition is to grow to reach between $40 million to $50 million origination volume monthly. 

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