NewDay Financial LLC is homing in on the market for home loans to members of the military services, veterans and their families.
The Veterans of Foreign Wars last month designated NewDay as its exclusive mortgage lender to VFW members.
"NewDay Financial demonstrated to us that they help their customers make the right choices," said the veterans group's quartermaster general, Lawrence Maher.
"The company's loan specialists are committed to working in an honest, open and respectful way with servicemen and women, veterans and their families," Maher said.
Based in Fulton, Md., NewDay originates mortgages guaranteed by the Federal Housing Administration and Department of Veterans Affairs.
These include FHA-insured reverse mortgages, which are known as Home Equity Conversion Mortgages.
Origination volume on "forward" mortgages is about $20 million to $25 million a month, with another $5 million a month in home equity conversion loans, according to the company.
NewDay securitizes forward mortgages through the Government National Mortgage Association — the company became a Ginnie Mae seller-servicer a year ago — and sells HECMs to investors.
The company uses direct mail to reach its customers. Its chairman, Bruce Giacoma, is a Wall Street veteran.
He encountered NewDay more than two years ago while researching direct mail operations for a bank client. NewDay has a direct mail subsidiary, Chrysalis Analy-tics.
"I saw the way they did the analytics and the way they approached the direct mail business and was extremely impressed," he said in an interview.
Six months later, NewDay's chief executive officer, Rob Posner, asked Giacoma to become chairman, bringing his Wall Street and secondary mortgage market expertise to the company.
Giacoma immediately went to work on getting NewDay approved as a Ginnie Mae issuer.
The issuer approval came in August 2009, and it has allowed the company to ramp up its VA program.
NewDay's VA single-family originations have jumped 285% since last year.
"As a senior [citizen] and having served in the military, I am extremely committed to the needs of the veteran," Giacoma said.
He started working on Wall Street in the late 1970s during the development of the mortgage-backed securities market.
He has founded and sold two mortgage banking companies to banks.
In the interview, he noted that several colleagues who worked for him on Wall Street are running the trading desks now.
"Because of my background, I stay very close to the dealer community and with our investors," Giacoma said.
Wall Street is "kicking and screaming" to get back into the mortgage business, he said.
"We have great alliances and great expectations for the future," the NewDay chairman said.