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Despite Shrinking Mortgage Market, FirstMortgage Strengthens its No. 2 Position

By on March 4, 2016

Grew Mortgage Production 32%, Market Share Jumped from 14% to 20% in 2015

The past 10 years have been challenging for the Puerto Rico mortgage market. Since 2006, the island has experienced a reduction in the number of mortgage closings and players in the local market.
From 13,419 new-housing units sold in 2006, the number has steadily declined to just 1,759 new-housing units sold as of the third quarter of 2015. Likewise, the Puerto Rico mortgage market has grown smaller, with fewer competitors as a result of the ensuing bank consolidations.

On April 30, 2010, Westernbank, R-G Premier Bank and Eurobank were acquired by Popular, Scotiabank and Oriental, respectively, absorbing their mortgage divisions. Then in late 2012, Oriental acquired the assets of Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) in Puerto Rico.

“As recently as last year, we saw the exit of a major competitor, Doral Bank, in the mortgage industry. Despite the continuing reduction of the local mortgage market, FirstMortgage has not only been able to maintain its position in the marketplace but also to increase it share of the market,” Luzmarie Vélez Miro, senior vice president and sales & production director at FirstMortgage, told Caribbean Business during an exclusive interview.

FirstBank’s mortgage division has been steadily growing its market share, from 14% a few years ago to 20% in 2015, which Vélez Miro credits to several factors, but mainly from taking advantage of market opportunities that arose during the time.

More efficient operation

While the industry’s average cycle to close a mortgage-loan transaction is between 35 and 45 days, Vélez Miro insisted that FirstMortgage has been able to reduce its average below that range.

“We enjoy a 20% share of the island’s retail mortgage market. We strengthened our customer-service efficiency by re-engineering our processes and generating new products, which brought changes and expected improvements in our line of business and the evolution of our work culture,” the FirstMortgage official said.

With government-sponsored programs that help defray closing costs practically nonexistent, Vélez Miro said FirstMortgage created “Lender Paid,” a program where the mortgage bank contributes a portion of the closing costs.
“This gives clients, who do not have the needed funds to pay closing costs, a little extra money to acquire a new home or refinance an existing one,” she said. In addition, the bank also made available the 203k loan from the Federal Housing Administration, which provides additional money to make repairs or upgrades of repossessed properties.
FirstMortgage also recently launched its “Tu Casa” mobile application, which allows users to prequalify for a loan, check listings of new or repossessed homes, and even chat with a bank official, all through a smartphone or mobile device.

New ad campaign

As part of its ongoing business strategy, FirstMortgage tonight will launch its new “Tu casa, tu mundo” (“Your home, your world”) ad campaign.

The effort, which represents a $1 million investment in production and media placement, presents relevant solutions to circumstances that people could experience in simple, everyday situations that led them to organize their lives and lifestyles around their house or apartment, explained Jorge Rosario, marketing manager for FirstBank.
The “Tu casa, tu mundo” ad campaign launches with two 30-second television executions each: “Sala” (“Living Room”) and “Cocina” (“Kitchen”).

“These days, we have created a very special world at home. The house has become the family activity center where we cook and dine as in a restaurant, work as in an office. It’s an activities lounge, a movie theater, a gym,” Rosario explained.

The new ad campaign was produced entirely on the island, and includes television, cable and digital executions, national and regional print, digital billboards and promotional materials at FirstBank branches and FirstMortgage centers.

It was executed by local production house Nordstrom, with a team of 85 local talent and production crew.

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