Movement Mortgage Aims to Do Good While Doing Well
According to co-founder and CEO Casey Crawford, Movement Mortgage underwrote almost 10,000 loans last year for people who never ended up buying a home.
Many lenders would consider that a bad thing, a sign that their underwriters were wasting time evaluating people who didn’t go on to be customers. For Movement Mortgage, though, it’s a key part of the business model.
Founded in 2008 by Crawford, a former NFL tight end on teams such as the Carolina Panthers and Tampa Bay Buccaneers, and Toby Harris, a former vice president and head of joint ventures for National City Corp., Movement Mortgage aims to tackle what Crawford sees as flaws in the conventional home lending process.
Specifically, he says, the company fully underwrites all of its customers up front before they even begin looking at homes. It’s an approach that Crawford says stems from his post-football days as a real estate agent and investor when, he notes, almost every deal that failed went south during the financing stage.
“If you had a problem in the transaction it was at the point of the mortgage and getting financing,” he says. “Oftentimes [buyers] were getting prequalifications from lenders and then we were finding as we got closer to the closing date that those prequalifications really weren’t working.”
“They really hadn’t truly underwritten the borrower. They had just done a really cursory pre-qual,” he explains. “And then we would get into the process, and they would start to pull credit documents and find out that there was some problem with the loan, and we wouldn’t be able to close by the date of closing.”
From day one, Movement Mortgage’s philosophy has been to fully underwrite borrowers’ credit before they start shopping for a house, Crawford says.
“Most lenders will say, ‘We don’t want to invest the underwriter’s time and energy in the underwriting until the borrower finds a house,’ but we see that as being fundamentally backwards,” he adds. “We think that every borrower should have their credit fully underwritten up front so they know how much home they should be shopping for. The last thing we want to see a borrower do is fall in love with a home that is going to really create a debt burden for them that is more house than they can afford.”
This unconventional approach seems to be working. Since its launch, Movement Mortgage has grown from a team of four to a firm with 3,000-plus employees in 350 locations across 40 states. According to Crawford, the company will close nearly $16 billion in loans this year.
Movement Mortgage’s rigorous approach has been particularly attractive to Millennials, says Crawford.
“I think particularly Millennials who watched their parents and parents’ friends go through foreclosure or fear of foreclosure have a deep and sincere appreciation for fully understanding how much debt they can assume and how they can pay it off, and that has [made our approach] an appealing value proposition,” he says.
Beyond changing the way the mortgage business works, Movement Mortgage also aims to directly impact communities in which it operates, an effort it pursues through its Movement Foundation, which Crawford says has to date reinvested $16 million in underserved communities across the country, putting the money into community centers, charter schools, and a variety of not-for-profit organizations.
It’s good from a charitable sense, of course, but it’s also a good business decision, says Crawford. “I think it is something that really resonates with our clients.”
That’s particularly true, he notes, as the mortgage industry still works to rebuild its reputation in the aftermath of the 2008 financial crisis.
“So many of the financial service providers [of that era] were known for what they took from communities,” says Crawford. “We want to be known for what we have given back.”
Editor’s Note: Watch Crawford and Fannie Mae’s Andrew Bon Salle, executive vice president, single-family business, in their recent appearance on CNBC’s Squawk Box.