Lender Life

Solera National Bank mortgage lenders Ashlyn Crump (left) and Karen Monroe.

Solera National Bank finds a military lending niche in Colorado

By Audrey Wright

Since 2007, the year that Solera National Bank in Lakewood, Colo. opened its doors, nearly 30 percent of all commercial bank failures nationwide have involved de novo banks. Where many of its new start-up peers have floundered, Solera National Bank has flourished, thanks in part to favorable economic conditions in Colorado but also to the bank’s strategic focus on serving emerging commercial and consumer markets.

The $170 million-asset community bank bills itself as a high-touch, high-tech community business bank that strives to deliver personalized customer service that is welcoming, inclusive and respectful. The bank also puts special emphasis on serving Colorado’s Hispanic population, which represents about 1 million individuals and is the eighth largest concentration of Hispanics in the nation.

Although chartered as a commercial business bank, Solera National Bank has taken steps to expand its retail side of the house. A significant move in this direction, involved the launch of a residential mortgage division staffed by approximately 50 new hires operating from five loan production offices across the state. In a news release announcing this strategic transition, Solera National’s CEO stated that the bank’s leadership saw significant opportunities in residential mortgage lending and therefore expected to enhance the bank’s profitability through the sale of loans to the secondary market and by building a high-quality residential mortgage loan portfolio that would remain on the bank’s balance sheet.

This has proved a winning strategy. Fueled by the sales of its mortgage loans in the secondary market, Solera National Bank’s noninterest income totaled $2.7 million in second quarter of 2013, compared with $1.7 million in first quarter of 2013 and $230,000 in second quarter of 2012.

Serving those who serve
With two of the new mortgage production offices located in Colorado Springs—home to numerous Army and Air Force military installations, including the U.S. Air Force Academy—Solera Mortgage, a division of Solera National Bank, is staying true to its strategy to serve emerging markets by going the extra mile to work with active-duty military families and veterans.

Two of Solera National’s lenders—Karen and Thomas Monroe, a husband and wife team with more than 50 years of experience in mortgage lending between them—also recently achieved the unique distinction of becoming nationally certified to work with military borrowers. The certification course, offered exclusively by nonprofit USA Cares Inc., educates lending professionals on the differences in lending to the military community by training them on the unique “lifestyle” circumstances that are often typical for military families. Special emphasis is given to the military rank and pay system so that lenders can better determine how much an individual can borrow. The course also focuses on foreclosure prevention practices that lenders can share with borrowers to help avoid mortgage delinquencies.

Karen Monroe has worked in the Colorado Springs market since she began her career more than 31 years ago. Initially starting out behind the scenes as a loan processor, she moved to underwriting and then to closing. Then with encouragement from her husband, who at the time was a senior mortgage underwriter, she move on to work in loan origination.

Her breadth of experience has uniquely positioned Monroe for success as she understands the business from the inside out. She says that at past jobs when she was processing and underwriting mortgage loans it was not uncommon to run into problem after problem as a loan’s closing date sped closer and closer. Many of the issues she encountered arose because the loan originator simply hadn’t asked the right questions.

Monroe can’t stress enough the importance of digging deep at the beginning of the loan qualification process, “Community banks across the country might not have the proximity to military bases that we do, but they are probably already serving veterans who are eligible for VA loans or VA Interest Rate Reduction Loans and don’t even know it.”

Monroe says that she has worked with a number of customers who ended up qualifying for no-cash-out-of-pocket Veterans Administration loans but who had no idea they were eligible to benefit from those programs, possibly because either their service occurred long ago or they were active duty for only a few months before they were honorably discharged. “If you served in the military during war time for more than 90 days you may be eligible for a VA loan,” she points out. This also applies to National Reservists and members of the National Guard.

Another misconception that Monroe encounters with some regularity is the belief that you can only use your VA benefit once. “As long as you sell the house that was originally purchased using the VA loan, you can use the VA benefit again and again. The funding fee does go up, but a borrower can still get in with no cash down,” she explains.

Monroe agrees that VA loans have a little more paperwork and disclosures than conventional loans, but says that the VA loan process is actually quite easy because each service member is issued a standardized LES (Leave and Earnings Statement) that contains all the information a lender would need to know about the person to provide him or her with a mortgage loan. VA Interest Rate Reduction Loans also still allow for streamlined refinancings, an option no longer available through other programs, including those through the Federal Housing Administration.

Solera National sells the majority of its loans into the secondary market, which makes it even more imperative for Monroe to go the extra distance to stay in touch with her borrowers. Care packages at closing, handwritten notes, birthday cards, client dinner parties—these personal touches bring customers back to her office to refinance their homes or purchase new ones. In fact, Monroe originally learned about the USA Care military certification program from a veteran whom she had helped with a refinance more than 10 years ago.

Even with military-lending giant USAA situated right across the street from her offices, Monroe says that Solera National’s mortgage division has been able to thrive. “With bigger lenders there are so many layers of bureaucracy. If I have a loan that no one wants to buy in the secondary market, I have the flexibility of turning to Solera National Bank and seeing if we can work something out.”

She adds that employees of USAA have walked across the street on their lunch breaks to have their mortgage loan needs met by Solera National.

“In the end, this business is all about building relationships,” she says. “A lot of customers are referrals, and I have always closed a loan on time.”

Audrey Wright-Cipriano (audrey.cipriano@icba.org) is ICBA’s director of marketing and brand strategy.