The new mortgage banking company that KB Home and Nationstar Mortgage LLC are forming should be up and running by the end of this year, according to KB Home president and chief executive Jeffrey Mezger.
The joint venture that will be called Home Community Mortgage should be “operational by the end of the year—once all licensing and agency approvals have been completed,” Mezger said during a conference call on Thursday.
The two companies announced the joint venture in January. Nationstar currently originates loans for KB Home customers and has loan officers at the builder’s communities.
“Our relationship with Nationstar is gaining traction,” Mezger said. “We are seeing higher levels of customer satisfaction, quicker and more consistent loan approvals and more predictable deliveries.”
On average, it takes Nationstar 15 days to close a loan after completion of the home, while it takes outside lenders 24 days.
“This nine-day reduction in cycle time to closing is significant for our business. And we expect that these times will compress even further as the working relationship between the teams becomes more established,” the KB Home CEO said.
KB Home delivered 1,485 homes in the first quarter and it has a rising backlog of homes.
The joint venture will provide additional benefits in terms of backlog management and “provide a new earnings stream to KB Home,” Mezger said.