Editor’s note: As the real estate boom soars to new levels, pumping money through the industry like blood through a runner’s arteries, real estate agents, title companies, mortgage brokers, lenders and homeowners alike are prospering. In this three-part series, Inman News explores the real estate windfall, digging to find who’s making tons of money in this heated  market. (See Part 1: Real estate agents reap housing boom harvest and Part 3: Real estate boom pumps up title insurance.)

In 2004, Johnny Vlogianitis, a Wells Fargo Home Mortgage retail sales supervisor, generated a jaw-dropping $170 million in loans. This year, he expects to generate more than $200 million, thanks in large part to the real estate boom.

“After the first quarter of 2005, I’m already past $125 million,” said Vlogianitis, who is retail sales supervisor for Wells Fargo Home Mortgage in Garden City, N.Y.

“The boom has caused loan production to soar,” said the fast-talking New Yorker, who spits out numbers and industry acronyms at a breakneck pace.

As the real estate boom rocks on, record amounts of money are being generated – and mortgage professionals are raking in a significant piece of the action.

Total U.S. mortgage volume for 2004 was $2.81 trillion, according to Inside Mortgage Finance. And for every mortgage loan, there’s almost always a commission to mortgage brokers and loan officers.

“Mortgage brokers are doing well because of the boom,” said Sue Simpson, a Castro Valley, Calif., independent mortgage broker with 27 years of experience. “Not only do you get purchase business, but you’re still doing refinance business.”

Vlogianitis noted that the rapid appreciation of home values has contributed to increased loan volume. This is because many of his clients purchased homes with a first and second mortgage in order to circumvent having to pay private mortgage insurance.

Because their homes appreciated so rapidly, they can consolidate those loans and still have an acceptable-loan-to value ratio, Vlogianitis said, and this has caused a consolidation boom. Other factors play into his success, the sales supervisor said: “This is my fourth year here, so I’m getting a reputation. And Wells Fargo has competitive pricing and a wide variety of products.”

Needless to say, not only individuals, but also companies as a whole are flourishing thanks to the boom.

Countrywide Financial is one of the outstanding growth stories of the mortgage lending business. The home loan heavyweight has aggressively expanded and formed new joint venture partnerships with real estate brokerages in the wake of slower mortgage refinance volume.

With the exception of a few dips in stock value, Countrywide shares increased from between $5 and $10 in 2000, to around $35 a share this week. Over the last year, Countrywide shares (NYSE:CFC) have traded at a low of $30.30 and a high of $40.31 per share. Countrywide’s market capitalization is $20.5 billion.

At the end of July, Countrywide had funded $256 billion in loans for all of 2005, according to its monthly operations data. While the company’s second-quarter profit in 2005 declined 28 percent compared to the second quarter of 2004, an uncharacteristic dip, its loan production rose 21 percent, to $121.1 billion.

Countrywide has five operating segments, including mortgage banking, capital markets, insurance, banking and global operations. The mortgage banking segment originates, purchases, securitizes and services mortgage loans in the United States.

Rival mortgage lender Washington Mutual (NYSE: WM) is also racking up impressive numbers. The giant company struggled last summer, but recently reported that 2005 second-quarter net income climbed a breathtaking 73 percent, to $844 million, compared with net income of $489 million in last year’s second quarter. The company now has four consecutive quarters of profitable mortgage activities to its credit.

Total assets of $323.5 billion at the end of the second quarter of 2005 increased $3.84 billion from $319.7 billion at the end of the first quarter of 2005 and $44.99 billion from $278.5 billion at the end of the second quarter of 2004, reflecting continued strong asset generation capability.

Such success stories have not escaped the notice of potential employees, according to the president of the National Association of Mortgage Brokers.

“You’re seeing a growing market particularly for the number of mortgage brokers,” said NAMB President Jim Nabors. “I understand that the number of licensees in California has more than doubled from 40,000 to 80,000 in the last four years.”

The real estate boom, and the lucrative returns to mortgage brokers and loan officials, have drawn many newcomers to the field, he said. “Across the country we’ve seen dramatic increase in the number of people entering our industry. You are seeing a record number of home ownership and a record number of first time home buyers.”


Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.

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