Stephen Adamo is head of mortgage banking for Santander Bank. He talks with Providence Business News about the regional mortgage lending market, how it compares to other parts of the country and what that tells us about the economy.
PBN: How would you describe the regional mortgage lending market today? Why?
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ADAMO: Regionally, there continues to be healthy competition from peers and some new entrants into the marketplace, like mortgage technology companies. The industry on the whole has changed significantly since the housing crisis in 2008. There are now additional requirements in place to help ensure that consumers can truly afford to repay the loans before they secure them.
PBN: What most challenges it?
ADAMO: Buying a home today is very different than it was before the housing crisis. The regulatory requirements are more stringent today and were implemented with the goal of helping to ensure that borrowers are purchasing homes that they can afford. This includes requiring more documentation during the application process to demonstrate that the borrower can make this financial commitment. To accommodate these changes, we have invested in new technology to streamline this process.
PBN: How does the Rhode Island market compare to some of the other areas in Santander’s footprint? Why?
ADAMO: When compared to Massachusetts and Boston Metro, our main markets, Rhode Island is appreciating at a slower pace. While improving year over year, the Providence market still slightly lags the three- and five-year national numbers. I think that the suburban markets will continue to improve throughout our footprint, including Rhode Island. We have a sizeable customer base in Rhode Island and offer a variety of products to serve the lending needs of borrowers throughout the state – from Pawtucket to West Warwick to Tiverton and Little Compton.
PBN: Where geographically is the bank seeing the most growth and what does that say about the local economy and housing market?
ADAMO: The housing market is rebounding nicely and getting stronger. We are seeing the most growth in the New York area. While the Rhode Island economy has come back a little slower than others, it is making good strides as unemployment has improved. While it is still a bit behind the national average, housing prices are coming back.
For Santander, Rhode Island has a broad customer base and we lend in all communities, with a concentration in Warwick and Providence. The overall real estate market in Rhode Island continues to be relatively affordable and the suburban markets should continue to improve.
PBN: Analysts expect the Federal Reserve to increase rates multiple times this year. Do you agree? If not, why not? If so, how will that impact the mortgage business?
ADAMO: I cannot speculate on whether the Federal Reserve will increase interest rates this year. If interest rates do go up, then home purchases will most likely go down.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
