PrimeLine Capital flourishes amid changing mortgage landscape

Undaunted, they have a plan to negotiate around those issues too.

“There’s still plenty of refis out there,” Lawson said. The refinancing boom of the last couple of years may be gasping its last breaths under the suffocation of increased rates, but: “We’re doing mostly cashout refinanances,” Lawson said. Indeed, the company has increased its share of refis from around 10% last year to a level that hovers around 30% now.

Escaffi expounded: “When rates go up, we switch to cashout refis and purchase refis,” he said. “Cashout is not dead because with home prices going up there’s more equity to be tapped into. The other thing that impacts it is are constraints of supply in the market with buyers having a hard time buying homes. If they can’t buy homes, they’re trying to make their current homes even nicer. So they’re tapping into their equity to do home renovations and home improvements. There’s still a lot of opportunity. Across the board, everybody’s numbers have gone down but, relative to the competition, we’re holding strong.”

The two have also been looking more closely at providing non-QM loans – a segment that has emerged prominently as industry players pivot their tactics amid mercurial rates. “Back in December, and even into this year, we spent a pretty good amount of time trying to figure out how to incorporate non-QM into our business,” Lawson said. But after reaching out to a lender for insights, nobody was able to explain ways to market the segment to a potential customer base, he said. “We just talked to another lender, and are getting signed up with them,” he said, adding that the goal is to have the product available by April to represent some 10% of the company’s business.

Escaffi is similarly unpanicked by a changing landscape “We’re both very confident,” he said. “The industry is definitely going to shrink. When interest rates get higher, and the market just gets tougher on mortgage companies, what happens is the pie becomes smaller and companies and loan officers usually fall out. But we’re firm believers that the cream always rises to the top. If you’re really good at what you do, take a bigger share of the pie. We’re not worried about the market getting tougher it’s just the environment we have to play in now.”