Franklin American to Keep Servicing.

Byline: Bonnie Sinnock

Franklin, TN-Times have been tough but Franklin American Mortgage Co. plans to continue to grow by sticking to conservative lending traditions, keeping an eye out for fraud and adapting to advances in regulation and scalable business-to-business automation, according to president and chief executive officer Daniel G. Crockett. It also plans to start retaining some of the servicing on its mortgages.

Mr. Crockett believes Franklin American may produce $22 billion to $25 billion in government/government-sponsored originations this year, up from more than $18 billion last year. It has been considering cautiously increasing its sales force by 5% to 10% and possibly replacing some existing staff that lag in performance.

Recently, Franklin American has primarily been a correspondent lender, producing about 57% of its business through that channel year-to-date as of March 12. It produces another 36% through wholesale and 7% through retail, Mr. Crockett said. All of its loans have been sold servicing-released but starting early in the second quarter it plans to begin retaining some servicing, a move he said the company considers prudent given its top-15 lender status and "the market environment being what it is."

Like others, Franklin American has had to contend with capacity issues as rates dropped and refinancing ticked up at the end of last year into the beginning of this one. Mr. Crockett said its staff has handled them but working "a little harder" and "a little later," something he found preferable to hiring new staffers who might have to be laid off when business slows.

While others have experienced longer loan lock extension due to these capacity issues, Franklin American said its service levels have remained "relatively good," although by necessity today's underwriting and funding is "a lot more involved" than in the past. "I can't say we've seen huge, drastic change," he said, although he noted the industry as whole has not been "at peak service levels." Some larger competitors, he said, have offered "nothing else but 90 day locks."

"That's the minimum in play for refis for some people," Mr. Crockett said. He said Franklin American has been encouraging longer lock periods due to the refi environment but has no particular corporate policy on the question.