Cliffco Mortgage Bankers is among the rare independent mortgage banks doing more business than last year. And it’s looking to expand.

The New York-based independent bank exceeded its 2022 production volume of $400 million in August, but the end goal is far more ambitious: The company is aiming to produce between $3 billion to $5 billion in origination volume annually.

To get there, Cliffco, which has been in business since 1987, is going after the non-qualified mortgage (non-QM) market and investing in tech to get in front of buyers and non-agent referral partners.

Non-QM ripe for the taking

Faced with a lack of inventory across the country, lenders have been exploring ways to create new buyers. Target buyers for Cliffco include non-traditional buyers seeking investor loans. They are coming into the space in a very big way, Ace Watanasuparp​, a partner at Cliffco, said in an interview.

“On the non-QM side, only 3% of the market has been penetrated. Lenders in specific regions are all cannibalizing on each other’s volume. But we’re heading into different segments of the ocean. We’re going to be capturing market share, we’re going to teach people how to catch the type of product that they’re normally not used to fishing for so they can diversify their product offering and in return, they’ll give us some loyalty and list us as one of their preferred lenders,” Watanasuparp​ said.

About 30% of Cliffco’s production volume consists of non-QMs and executives expect that share to grow to 40% in 2024. 

Roughly 20% of Cliffco’s production comes from the wholesale channel and 80% of origination volume comes from its retail channel – through which it offers GSE, government loans and non-QM products. 

Currently licensed in 18 states, Cliffco plans to expand its footprint to 40 states by 2024. The lender has about 80 loan officers and aims to hire up to 100 in states.

Capturing leads with tech

Another priority for the lender is procuring leads through its proprietary technology.

“The market is retracting but it’s the best time to build,” Watanasuparp said.

Cliffco’s proprietary CRM platform enables loan officers to break away from being heavily dependent on real estate agents for referrals.

“In the past, we’ve always been dependent upon the real estate brokerage community, referring us to deals as loan officers,” Watanasuparp said. ”But in today’s marketplace with technology, we actually have the ability to get in front of the customer first, incubate the leads, and then give it back to the Realtors. So that’s something that we’re approaching the market a little bit differently.” 

The next step for Cliffco is creating an automated workflow system for its loan officers through the CRM, which will enable them to keep in touch with customers real-time.

“The database and the CRM tool is key for us to be able to monitor the different life cycles of the customer. How many times have they refi’d? Are they a warm lead, hot lead, cold lead? Things of that nature will all be very, very helpful, as we look to monitor the behaviors of our consumers and what the next trends are,” Watanasuparp said.

In a market where retail IMBs are averaging a net loss of more than $500 on each loan originated, Cliffco plans to bring that cost down by utilizing AI and automation.

“We are scaling and expanding through technology, making it more seamless, making it more efficient as we start to utilize AI underwriting,” Watanasuparp said. “We plan to use bots in terms of automation for our disclosures. The more we can lean on technology, the cost per file becomes that much lower. But the client gets to benefit from that.”