CFBank, the wholly owned banking subsidiary of CF Bankshares Inc., ceases its direct-to-consumer mortgage (DTC) business and instead focuses on retail loan origination.
The company said it has suspended issuance of new rate freeze commitments through its DTC mortgage business from June 30 and will work to close its loan portfolio and commitments. existing over the next few months.
CFBank’s decision to end its DTC mortgage lending business is the result of changing market conditions in 2021, with the residential mortgage market experiencing price volatility, declining refinancing volumes, squeezing margins and declining market conditions. increased competition in the market, among other factors, which led to a difficult environment, the company said. Market conditions caused CFBank to experience a prepayment charge (EPO) increase in 2021 as the number of borrowers repaying loans in the first six months after origination increased significantly.
In addition, the decrease in DTC mortgage origination and related income during the second quarter, together with the increase in EPO expenses, is expected to result in an after-tax loss for DTC’s mortgage lending activity.
âCFBank opportunistically entered the DTC mortgage industry in 2018, and we benefited from this timely business decision,â said Timothy T. O’Dell, President and CEO. âDTC’s mortgage lending business has been a major driver of commission revenue for CFBank over the past two years, and the commission revenue generated from this business has enabled CFBank to invest in expanding its presence and presence, as well as in the constitution of capital. “
CFBank says it will strive to develop and expand its commercial and retail banking business, as well as retail mortgage lending.