Bank Starts Local Wholesale Lending

June 11, 2004
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IONIA/GRAND RAPIDS — The Ionia County National Bank (ICNB) expanded on two separate fronts this past spring.

Not only has ICNB established a foothold in the Grand Rapids market, but it has entered into the realm of wholesale lending as well.

“We saw the (Grand Rapids) market as a natural extension of the company,” explained Douglas Cook, senior vice president.

“The business climate in Grand Rapids is so very lucrative,” he added, “and even though it is very well banked, we think there is a lot of potential there for us. But we knew that to just go in and be one more commercial, conventional bank on the corner is going to just throw us into a bucket with a lot of other pretty well-run banks.”

So ICNB reached out to a pair of mortgage brokers with whom it had established a relationship — Kristin and Brian Tews — and were able to utilize their experience to form ICNB Lending, a conforming wholesale lender.

“The Bank of Ionia decided they wanted a presence in the Grand Rapids market,” said Kristin Tews, director of wholesale lending. “And they thought the best way to do that would be through working with the brokers directly.”

A wholesale lender is a federally chartered bank that originates usually conforming loans through a network of independent mortgage brokers, and then may sell those loans into the secondary market.

Fifth Third, Countrywide, Chase Manhattan, Wells Fargo, and Flagstar Bank are among the few banks with a local presence that have a wholesale division.

“The wholesale market is a little bit different niche,” Cook said.

“It’s not something that everyone has, and we felt there were some efficiencies to be gained by bringing Brian and Kristen on with the bank and having them use their expertise to help us carve a new niche (in Grand Rapids) so we wouldn’t have to compete with everyone else around us.”

In comparison to the other wholesale lenders serving the Grand Rapids market, ICNB Lending has an advantage in that it is not only local but also small compared to the wholesale competition.

“From the top level of the organization to the people on the street that actually do the work, we have a more intimate knowledge of the people we’re doing business with,” Cook said.

“That allows us an opportunity to be a little more receptive and quicker on the ball to respond and will help give us a competitive advantage over some of the bigger companies.”

“Our strategy is to work with brokers who want to build a relationship with a lender as opposed to someone who just throws their applications on a pile and works their way to it,” Kristin Tews added.

He said ICNB Lending’s strategy is focused around a quick turnaround time, aiming for next or same day underwriting and to close files within four to five days.

One of the methods it uses to meet such a timetable is a unique service called remote underwriting.

As brokers, the Tewses had often considered how much time they could save if, instead of the broker bringing files to a lender’s office for underwriting, the underwriter would come to the broker.

ICNB Lending adopted the suggestion, and the remote underwriting practice helps to assure brokers a quick answer for their clients.

“Everything is about how quickly we can get people an answer,” Cook said, “whether a ‘yes’ or ‘no.’ Sometimes you could get a ‘no’ from us, but that just allows the broker to move onto the next option that much quicker.

“So either way,” Cook said, “we’re helping them to better serve their customers.”

Although the ICNB Lending sales office is located in Grand Rapids, the wholesale division extends through the entire ICNB service area, establishing broker relationships in Ionia County as well as Grand Rapids. Although the final processing is performed at the main office in Ionia, all broker relations are through the Grand Rapids office.

Currently the majority of ICNB Lending’s loans have been residential in nature, but there are plans to soon expand its commercial lending.

ICNB was founded in 1934 and has offices in Ionia, Belding, Grand Rapids, Lowell, Sunfield and Woodland, Mich.  

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