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The Island Mortgage family of brokers has found a new, bigger family within Marco Community Bank.
When owner and operator of Island Mortgage (a 20-year fixture in loan brokerage on the Island) Anthony Iannotta started feeling the pinch of new regulations by the federal government, he didn’t know if his business could remain competitive.
Traditionally, mortgage brokers serve as liaisons between borrowers and lenders, matching brokers with appropriate loans. Even Iannotta agrees that some brokerage companies made practice of steering consumers to high-cost, riskier loans that are said to have helped fuel the subprime mortgage crisis.
The new regulations in effect today require brokers to disclose exact amounts of earning fees, which put a downturn on yield spread profits. Another pinch is the Home Value Conduct Code put into effect May 1, Iannotta explained.
Faced with new challenges that brought wholesale mortgage brokering to a near halt, he brought an idea to Marco Community Bank President and COO Richard Storm. Instead of doing business the old way — originating loans for lending institutions that then sold the loans to agencies like Fannie Mae and Freddie Mac — the team of seven from Island Mortgage now work for Marco Community Bank.
Iannotta’s relationship with the bank started in its beginnings. He was a founding board of director in 2003. He accepted a position as executive vice president for the bank in June 2008.
“Basically, the biggest challenge for banks is generating fee income. With interest rate margins being squeezed the way they are, banks need to increase what you call fee income. Island Mortgage – it generates fee income – the income you receive from loans,” Iannotta explained.
They began testing residential lending/correspondent lending in April 2009, and his six employees were hired on as full time staff of the bank during the last 90 days.
“I am still president of Island Mortgage. It is not shut down. It’s inactive,” Iannotta said.
Had the partnership not been formed, Iannotta feared it was only a matter of time before Island Mortgage would have had to close its doors to the community for good, and would have left his employees jobless.
“It was a family for many years,” Storm said of the Island Mortgage staff. “And now, it’s a bigger family
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