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Interfirst, the phoenix of mortgage, lays off hundreds

Former employees say Interfirst Mortgage, which relaunched in 2020 after shutting down in 2017, wasn’t prepared for a shift to purchase.
The post Interfirst, the phoenix of mortgage, lays off hundreds appeared first on HousingWire.

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In 2012, Dmitry Godin was seemingly on top of the world. Interfirst Mortgage, the retail mortgage business he founded in 2001, had grown to $14.5 billion in originations, cementing its place as the 15th-largest originator in the country. By July 2013, things were going so well that Godin and his wife purchased a lakefront mansion in Winnetka, Illinois, for nearly $13 million, a record for the posh Chicago suburb.

But there was trouble ahead. The historically low interest rates that led to a boom in refinances in 2012 had ended, and Interfirst struggled to maintain volumes in following years as the market turned to purchase. The lender originated $10 billion in mortgages in 2013, $5 billion in 2014, $3 billion in 2015 and just $2 billion in 2016 before shutting down altogether in 2017.

Godin made plans to relaunch the business in late 2019 as a tech-forward lender that originated loans across both wholesale and retail channels.

“Market dynamics in early 2020, which have caused significant disruption to the origination and servicing markets, accelerated our plan to reenter the market with our new business model in a more robust way with a broader relaunch of the Company,” Mark Freedle, Interfirst’s executive vice president of production, told MReport in July 2020. “And today, unlike many other mortgage lenders, we reenter the residential mortgage origination market without any legacy challenges.”

In November, Interfirst issued pink slips to hundreds of non-commissioned loan officers at its call centers in Charlotte, North Carolina and Rosemont, Illinois, according to WARN notices in both states. In all, 351 employees were laid off – 77 in North Carolina and 274 in Illinois – which former workers estimate to be more than half of Interfirst’s total staff. The layoffs take effect on Jan. 21, 2022.

Former employees interviewed by HousingWire said the Chicago-based mortgage shop mainly originated safe, conventional refinance loans, and barely made any headway in the purchase market. 

“They were trying to capitalize on the refinance boom,” said Cullen Gandy, a classically trained opera singer who had been hired as an LO at Interfirst and left in July. “I think 99% of the loans that I was writing there were refinances. And then when, you know, when they felt like that was going to not be viable anymore, they were just like, alright, pack up ship and then cut the fat.”

HousingWire interviewed over a dozen former employees at Interfirst, who provide a portrait of a disorganized company with unclear long-term plans, a tech stack that hasn’t lived up to its billing, and an inexperienced staff not prepared to win in a purchase market. Interfirst’s ability to grow rapidly in a low-rate, refi environment but then struggle and contract when the market turns could be seen as a cautionary tale, even in an industry as cyclical as mortgage.

Interfirst provided no explanation for the upcoming terminations. The company did not respond to multiple requests for comment left by HousingWire.

Teacher, class has started

When Interfirst relaunched operations in 2020, it had no interest in competing with scores of well-capitalized lenders for ready-made talent. In fact, the lender boasted of its ability to train people with no background in mortgage banking to be top-notch LOs through a rigorous training course paid for by Interfirst. 

Teachers, nurses, first responders and food industry workers alike were encouraged to work in the company’s virtual call center. The pay would be below the industry standard – around $40,000 – but it was seemingly stable work that was beyond the front lines of the pandemic, former employees said.

One experienced mortgage veteran who interviewed with Interfirst for a sales manager position said the company described its strategy as hiring neophyte LOs and putting them in a consumer direct setting, with no outside or self-sourced business, “where websites like Lending Tree & Rate.com drive you clients with rates .25% -.375% below the market.” Clients upload all documents into their loan origination system directly to reduce/eliminate operational staff.

According to former employees and executives, business seemed strong as recently as summer 2021. The firm told HousingWire that it had originated $1.65 billion in mortgages between June 2020 and June 2021 and was actively recruiting new loan officers and support staff. 

A $175 million investment from private holding company StoicLane in October would be used to grow operations and refine and develop new technologies. (StoicLane did not respond to a request for comment.)

Still, former employees interviewed by HousingWire questioned what the company’s long-term ambitions were. 

“It felt like there was a desire to grow and that senior management was always chasing something new and shiny, whether that was a new name, a new brand or a new dialer,” said Justin Woodward, a former loan officer at Interfirst.

Woodward added that there was a notable push to hire new LOs and “to become more of a full-service lender and to get government-qualified to offer FHA, VA, and USDA loans.” 

Ultimately, the refi model can only turn a profit in a crazy market where processing times and capacity issues drive clients to find the lowest rate and fees, the veteran sales manager said. 

“But in a normal mortgage market where purchases outweigh refinances and people need more hand-holding and customization, this model falls flat.”

Building the plane while flying it

Interfirst executives also talked a big game about its new proprietary loan origination technology platform, former employees said. They evangelized that the tech stack would apply artificial intelligence to origination, eliminating upfront fees and cutting interest rates.

Gandy, who was based in Illinois, remarked that while he was there from Oct. 2020 to July 2021, Interfirst’s tech was “constantly in a flux” and was tested on the call center as it was being developed.

“They didn’t do anything to where it was like a beta, and then they would come out with a product, they would simply develop the product, in tandem with us doing our job,” he said. “A lot of my work involved me creating and learning workarounds. I mean, it wasn’t always terrible, but it was annoying.”

Another former loan officer who requested anonymity noted that artificial intelligence, though publicly advertised by the company, was never actually implemented. Most of the LOs who spoke to HousingWire said that the dialer system at Interfirst was faulty and constantly broke.

Two former executives in Interfirst’s wholesale division, who requested anonymity because they still work in the mortgage industry, also complained of lagging tech infrastructure and disorganization among managers.

Fahad Janvekar, another former loan officer at Interfirst, said that he assumed that the technology lags and disorganization at the company all played into the culture of a fintech startup.

“So, my thought was, okay, there’s going to be a massive scale up, but I also saw a little bit of an infrastructure lag,” he said.

Janvekar also remarked that he didn’t think the company would succeed in the purchase space, noting, “there’s an experiential knowledge gap, because you’re promoting people that may not necessarily be the right fit for those roles, and you’re already promoting them because you don’t have anybody else.”

Interfirst 3.0?

Retail shops that lean heavily on rate-term refinances have been the first lenders to shed large segments of their originations staff.

Those workers are more likely to be new to the industry and don’t have the book of contacts or the experience to hunt for purchase business themselves. 

In the last month, Better.com on a Zoom call clumsily laid off 900 staffers so it can compete with rivals for purchase business, a decision that led to the ousting of CEO and founder Vishal Garg. And last week, Freedom Mortgage’s subsidiary Roundpoint Mortgage laid off hundreds of sales professionals from its call center in South Carolina. 

Refinance numbers forecasted by the Mortgage Bankers Association show that the share of refi activity in the market has dropped from 64% in 2020 to 59% in 2021. In November, rate-term refinances fell 66% from the prior year. 

Overall, refis are projected to plummet 33% in 2022, not dissimilar to the market conditions that presaged Interfirst shutting down in 2017.

Industry observers who spoke to HousingWire believe that Interfirst, having shed much of its retail operation, will turn to mortgage brokers and hope that they feed them deals. 

“The retail model was set up to be upsized and downsized as the refinance market heats up and cools off,” said one mortgage pro who is familiar with Interfirst’s operations.

Whether Interfirst will actually make a notable dent in the wholesale market is up for debate. Former executives in the company’s wholesale division told HousingWire that it won’t come as a surprise if the lender moves to shutter wholesale all together.

Said one former wholesale executive, “There was a point before I left Interfirst where I thought to myself, ‘Oh my god, the service is so bad, wholesale will shutdown.’”

James Kleimann contributed reporting to this story

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com. 

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int

Journal

The Lancet Global Health

Method of Research

Observational study

Subject of Research

People

Article Title

Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study

Article Publication Date

12-Mar-2024

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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