This is the second year that Scotsman Guide has spotlighted veterans in the mortgage industry through its Top Veteran Originators rankings. This month, the magazine is highlighting both mortgage originators who are veterans and originators who specialize in U.S. Department of Veterans Affairs (VA) lending. Of course, there’s some crossover of the two segments.
It was a banner year for the mortgage industry in 2020 and the same can be said of VA lending. The number of VA loans nearly doubled from fiscal year 2019 to fiscal year 2020, according to VA statistics. Mortgage originators handled nearly 1.25 million VA loans in 2020, up from about 625,000 a year earlier.
The aggregate dollar volume of VA loans more than doubled, rising from $175.6 billion in 2019 to $375.3 billion in 2020, according to the VA. Last year’s average loan size was $301,044, up from $281,224 the year before.
The biggest change during this time span was tied to Interest Rate Reduction Refinance Loans, or IRRRLs. The number of these rate-and-term refis skyrocketed from 94,860 in 2019 to 662,064 last year.
Millions of veterans and their spouses take advantage of this type of financing due to its competitive interest rates, no-downpayment requirements, no private mortgage insurance obligation and lower closing costs. It makes sense that states with the largest numbers of VA loan originations also are the states with the largest veteran populations — California, Texas and Florida.
Trident Home Loans president Martin Medve was the No. 1 originator for Top VA Volume, according to Scotsman Guide’s rankings. He produced $436.8 million in closed loans last year and $345.6 million was tied to VA loans, or 79% of his total volume. Medve is a veteran himself, attending the U.S. Naval Academy from 1981 to 1985. He later became a Navy carrier pilot and flew the EA-6B Prowler.
“The biggest challenge for the veteran right now is competing against the conventional buyer,” Medve said. “Realtors right now are really apt to throw them a curve and say, ‘We want you to do a conventional purchase because we’re going against cash buyers.’ … When you’re working with VA buyers, it’s really important to do everything you can to give your buyer an advantage. You have to know and understand the VA programs inside and out.”
Other top originators who specialize in VA loans include Scott Evans of CrossCountry Mortgage LLC, who did $315.5 million in VA business; Saleem Ali of Arcus VA Mortgage ($271.3 million); Kory Kavanewsky of CMG Financial ($264.4 million); and Larry Gonzalez of Aligned Mortgage ($229.7 million).
Medve also heads the list of Top Veteran Originators. He’s followed by Ryan Purpero of U.S. Bank, who produced $297 million in overall loan volume. Gonzalez, who was last year’s No. 1, finished third in 2020 production volume at $232 million. Rounding out the top five are Jason Smith of Nova Home Loans ($211 million) and Jonathan Kulak of Trident Home Loans ($189.9 million).
— Jim Davis, editor, Scotsman Guide Residential Edition
Contributors: Jim Davis (JD), Neil Pierson (NP)
Verification: Krista Lowry, Brian Warr
VA lending grows as a share of government loans
The U.S. Department of Veterans Affairs (VA) surpassed 1 million home loans guaranteed by late May in the current federal fiscal year, which runs from Oct. 1, 2020, through Sept. 30, 2021. This comes on the heels of a record 1.25 million VA-backed loans in fiscal year 2020.
Although refinances have cooled, the VA expected the typical homebuying- season surge in purchase loans, said John E. Bell III, the VA’s deputy director of loan guaranty service.
“We should start seeing a lift pretty soon for the summer months, inventory willing,” Bell said. “That has been the biggest issue at this point, is just inventory availability and home affordability.”
VA loans made up about 2% of the mortgage market in 2010, but they account for about 13% of today’s market, Bell said. VA loans also have grown from about 30% of all government-backed loans to a whopping 60% share. Bell, who joined the VA in 2010, said the agency has worked hard to remove bureaucratic layers and adopt new technology. He also pointed to legislation from 2019 that eliminated loan limits for many VA borrowers. This allows veterans to obtain jumbo loans in high-cost states.
“Veterans just were precluded from being able to bid on those properties unless they had a lot of money to bring to the table,” Bell said. “Now we removed those maximums so that the veterans can compete in that space, which is a great story.” (JD)
John E. Bell III
Deputy director, loan guaranty service,
U.S. Department of Veterans Affairs
VA loan volume exceeds $375 billion
In fiscal year 2020, the number of VA loan originations (purchases, refinances and cash-out refis) doubled on a year-over-year basis while the aggregate volume of closed loans topped $375 billion, the U.S. Department of Veterans Affairs reported.
Nearly 1.25 million VA loans were closed nationwide during the 12 months ending on Sept. 30, 2020, up from about 625,000 loans a year earlier. The dollar volume of these loans surged by 113% during the most recent fiscal year and more than 100,000 loans were closed in three states with large military populations — California, Florida and Texas.
The average VA loan size increased by 7% on a yearly basis, going from $281,224 in 2019 to $301,044 in 2020. The top-five states for highest average loan size were Hawaii ($578,389), California ($438,986), Maryland ($382,114), Virginia ($366,537) and Massachusetts ($361,482).
Some of the least populous states also are ones where the fewest VA loans were closed last year. These include Vermont, Rhode Island, North Dakota, Wyoming and South Dakota. Fewer than 3,800 VA loans were originated in each of these states. The smallest average loan sizes, meanwhile, occurred in Arkansas ($206,550), Indiana ($211,024) and Michigan ($211,346). (NP)
VA purchase loan activity swells by 11%
Homebuying activities in the past year have been brisk, which is evident in the most recent annual purchase loan report from the U.S. Department of Veterans Affairs (VA). Across all U.S. states and territories, there were 428,421 VA purchase mortgages closed during fiscal year 2020 (the 12 months ending this past September). This represented an 11.4% increase from a year earlier, when 384,490 purchase loans were originated.
Similar to other segments of the mortgage market, however, purchase activity through the VA took a back seat to refinances. There were some 662,000 Interest Rate Reduction Refinance Loans in fiscal year 2020, or 53.1% of all VA originations. A year earlier, there were about 95,000 of these rate-and-term refis and they represented only 15.2% of VA business.
Still, VA originators benefited from hungry buyer appetites and rising home prices. The average VA purchase loan amount rose by 9.7% last year to $304,848. The top-five states for highest average loan size were Hawaii, California, Maryland, Washington and Massachusetts. The District of Columbia (as well as the territories of Puerto Rico, Guam and the U.S. Virgin Islands) also have exceptionally high purchase loan sizes, although they combined for only 1,418 VA purchases during the past fiscal year. (NP)
Veteran population declines in the U.S.
The number of veterans in the U.S. declined by about one-third between 2000 and 2018, from 26.4 million to 18 million, according to census figures. The drop-off coincides with the loss of vast numbers of the Greatest Generation. Only 500,000 World War II veterans were alive in 2018, down from 5.7 million in 2000.
Still, veterans make up a sizable share of the nation’s population — about 7%. Veterans and their spouses qualify for exceptional benefits, including home loans through the U.S. Department of Veterans Affairs, due to their military status. Mortgage originators who specialize in this type of financing will want to keep a close eye on demographic shifts.
A growing number of veterans are women. About 1.7 million veterans, or 9% of the total veteran population, are women. This share is projected to nearly double to 17% by 2040, census figures show. The median age of a veteran in 2018 was 65 and the states with the largest veteran populations are California (1.75 million), Texas (1.6 million), Florida (1.57 million), Pennsylvania (836,000) and New York (790,000).
According to 24/7 Wall St., the states with the largest numbers of active-duty personnel last year were California (162,000), Virginia (129,000), Texas (121,000), North Carolina (101,000) and Georgia (68,000). The highest per capita shares of active military personnel were in Hawaii, Alaska, Virginia, North Dakota and North Carolina. Hawaii led the way with 3,013 active-duty military per 100,000 residents. (JD)
