In planning to add 100 mortgage loan officers to its ranks, TD Bank is going against the grain.
The U.S. unit of Toronto-Dominion Bank said Wednesday that it plans to hire the additional loan officers throughout its footprint from Maine to Florida over the next six to eight months, despite an overall decline in origination volume and slumping home prices.
But the prospects of the mortgage business within TD Bank look much brighter.
"We have been fortunate to have grown our mortgage loan originations during the grip of the recession over the past couple of years by 47%," Michael Copley, TD Bank's executive vice president of retail lending, said in an interview.
The bank also said it recently appointed Malcolm Hollensteiner to the newly created position of director of retail lending sales to oversee residential mortgage production and the consumer and credit card sales team.
Most recently, Hollensteiner was the Middle Atlantic regional manager for PNC Financial Services Group Inc.'s mortgage business, a position he held since 2009. Overall, he has more than 19 years of experience in the industry.
TD Bank's expansion of its mortgage unit is a sign that the bank is upbeat on the business, despite its current struggles, observers said.
"For a company their size, 100 people is not a huge expansion," said Keith Gumbinger, senior vice president at HSH.com, a publisher of mortgage industry information.
"But the fact that they are hiring residential loan officers at all is an expression of confidence about the direction of the market within a reasonable time horizon," he said.
The move is also a vote of confidence in its own business.
TD Bank's mortgage loan portfolio has been performing better than most. The 30-day delinquency rate on first-lien mortgages at TD Bank is less than 3.5%, Copley says, approximately 375 basis points less than the industry average, which ranges from 7% to 7.5%.
With Hollensteiner based in Fairfax, Va., the company will be able to concentrate on a part of the country where it has had a lot of recent success, Copley says.
The metropolitan D.C. market "is a key growth area for us," he said. "We have a good network presence in D.C. and the customer demographics are concurrent with our high quality portfolio."
Copley attributes the bank's success in mortgages to a number of business practices.
For one, the bank retains all mortgage originations in its portfolio. That means it does not have to adhere to Fannie Mae and Freddie Mac criteria on condominium or investment properties.
The bank also does not have to pass along to customers the guarantee fees that Fannie Mae and Freddie Mac frequently charge, which can range from an eighth of a point to half a point, Copley said, meaning it can offer competitive rates.
Additionally, borrowers have access to the bank's branches seven days a week for purchase mortgages or refinances. And TD Bank loan officers routinely make house or office calls.
TD Bank has been expanding its business in general over the past few years.
Last year Toronto-Dominion acquired South Financial Group Inc. of Greenville, S.C., which added about 160 branches that were recently converted to TD Bank branches.
Additionally, the bank has been adding about 35 branches on its own each year for the past several years.
