Hartford Business Journal

12 Hartford Business Journal • November 30, 2015 www.HartfordBusiness.com In 2014, lenders originated 57,661 mort- gages worth $16.8 billion in Connecticut, way below the 98,720 worth $27 billion in 2013 and the 115,338 worth $31.3 billion in 2012, federal Connecticut mortgage-loan data shows. The mortgage falloff was especially pro- nounced among Connecticut's 10 largest home- loan lenders, whose number and value of loans were down by almost half from 2013 to 2014, data shows. The top 10 lenders were largely big, national or regional banks whose mortgage-loan portfolios took the biggest hits in recent years. Mortgage and realty experts cite stagnant home sales and the lengthy period in which interest rates have held at or below 4 percent, for the recent mortgage activity decline. The low rates triggered a burst of refinancings early on, but activity has since slowed considerably. "The real estate market in Connecticut is still soft,'' said GeoDataVision CEO Len Suzio, who advises banks on their lending strategies and protocols. "Most people have refinanced their mortgages at lower rates. It's not good.'' Final federal data for U.S. mortgage lend- ers' 2015 volume won't be ready for a few more months. However, Suzio says anecdotal infor- mation harvested from his conversations with Connecticut lenders signals that most haven't seen much of a pickup from weak 2014 volumes. At a recent conference of mortgage lend- ers in Bristol, where Suzio was among the presenters, he said he polled the 65 bankers present, representing 40 to 45 mortgage insti- tutions active in Connecticut, whether their volumes had improved this year, "and no one raised their hands.'' David Zamary is a lending senior vice presi- dent at Stamford's First County Bank. Zamary confirms that his bank's mortgage volume, too, ebbed in recent years, but so far in 2015 that volume is trending higher than last year. The reason, Zamary said, is that Fannie Mae and other buyers in the secondary-mortgage market are accepting slightly lower minimum credit scores and loans with downpayments as low as 5 percent. "We've been seeing a lot more first-time homebuyers,'' said Zamary, president of the Connecticut Mortgage Bankers Association. "A lot of people were on the fence. But they're getting off the fence.'' Even if home-loan rates climb into the low 4's, he said, that would not be high enough to choke off demand. Meanwhile, some relatively smaller but highly active Connecticut mortgage lenders say steps they have taken to expand their loan originations inside and beyond their home state are bearing fruit this year. Indeed, they and others say community lenders may be witnessing a return of consumer-mortgage demand to their windows from larger lenders such as Bank of America and Wells Fargo. Farmington Bank experienced a sharp drop in mortgage fundings in 2014 that the lender "had been expecting,'' said Chairman and CEO John Patrick Jr. "Many people have refinanced once or twice in the last five years,'' Patrick said of the slowdown. He added that Connecticut's slug- gish home-sales market, too, has impacted mortgage demand. According to federal data, Farmington Bank originated 785 home loans worth $207 million in 2014, well under the 1,138 loans worth $365 million issued in 2013. But Patrick insists his bank's mortgages, too, are gaining speed, spurred partly by the hiring of a regional mortgage-loan officer for its pair of new branches in East Longmeadow and West Springfield, Mass. It has two dozen other branches, mostly in central Connecticut. Up until the Great Recession, Patrick and others recall, U.S. mortgage lending largely was fueled by major American banks and from page 1 Lenders ply fresh markets for volume CT's Top Home Mortgage Lenders' Volume Mortgage Value (in $000s) Mortgage Loans Bank 2014 2013 % Diff. 2014 2013 % Diff. Wells Fargo Bank $1,188,541 $2,137,754 -44% 3,406 7,512 -55% People's United Bank $855,334 $1,188,250 -28% 1,751 3,413 -49% JPMorgan Chase Bank $733,919 $1,818,627 -60% 1,346 4,777 -72% Bank of America $731,135 $1,577,272 -54% 2,098 5,282 -60% Quicken Loans $713,192 $1,056,861 -33% 3,186 4,608 -31% Citibank $614,981 $1,134,573 -46% 1,235 3,631 -66% S O U R C E : G E O D A T A V I S I O N states; relatively high malpractice insurance costs; and the tendency of Connecticut med- ical-school graduates, who administrators say are competitive candidates, to gravitate toward major physician-residency programs in big cities outside of Connecticut. For its population, however, Connecticut has no shortage of doctors or residencies overall, though administrators say certain specialties are rarer than others. "You could make the argument that we actually have an adequate number of physi- cians. They're just skewed as far as discipline is concerned and with regards to geography," said Dr. David Henderson, UConn's associate dean of medical student affairs. If Connecticut is losing its doctors it begs the question: Why does the state have a high number of physicians? One reason is that Connecticut has a large number of foreign medical school graduates practicing here, according to the AAMC data. For its population, Connecticut also has a high number of residencies, who are more likely to stay in the state than people who simply graduate from medical school here. But an adequate doctor supply isn't guaran- teed long term, especially when nearly a third of Connecticut physicians are 60 or older. AAMC projects a national shortage of as many as 90,000 doctors in 2025, as an aging population's demand for services outpaces supply. Quinnipiac University's fledgling medical school, which will graduate its first class in 2017, could impact Connecticut retention rates in the future, though in what direction is unknown. Henderson's colleague, Dr. Jaqueline Nis- sen, UConn's associate dean for graduate medical education and faculty affairs, said there are plenty of hunches about why reten- tion is low. One of hers is that there simply may not be enough jobs for all of the doctors Con- necticut graduates. But she also thinks the state should fund a formal study on the matter, particularly as a potential wave of doctor retirements approaches. "We've got to replace those people and we've got to have a plan," she said. Breaking down the numbers AAMC's data reflect actively practicing doctors who graduated from UConn and Yale schools of medicine. UConn and Yale graduates who don't go on to do their residencies or fellowships in Connecticut have the lowest chance (19 per- cent) of practicing in Connecticut. That's a combined average, and it places Connecticut 41st in the country. On its own, UConn Medical School has a higher retention rate of 32 percent, which ranks 38th in the country among public medical schools. Those who do residencies in Connecticut are more likely to stay here than those who just go to an in-state medical school. About 38 percent of out-of-state med school grads who do their residencies at Connecticut hospitals, stay in the Nutmeg State. That reten- tion rate ranks Connecticut 45th in the country. And doctors who complete both medical school and their residencies in Connecticut have the best odds of sticking around — near- ly 52 percent. Dr. Bruce Koeppen, dean of Quinnipiac's Frank H. Netter School of Medicine, said it makes sense that residency location corre- lates strongly with retention. "The reason for that is during their residency period they meet the local doctors, and they often get job offers," Koeppen said. Though more than half of states have some form of debt-forgiveness program for medical students, Connecticut does not. Many states, including Massachusetts, Rhode Island, Vermont and Maine, partner with the National Health Service Corps, which offers loan forgiveness to primary care physicians who agree to practice in under- served geographies for a certain amount of time. The federal government requires states to match funds at least one-to-one. The programs are no magic-retention bullet, according to data on states that offer them. Rhode Island and Vermont both rank below Connecticut in retaining doctors who from page 1 Schools aim to keep more docs in CT Continued Continued John Patrick Jr., chairman and CEO, Farmington Bank Len Suzio, CEO, GeoDataVision Martin Geitz, president and CEO, Simsbury Bank Brandon Lorey, senior vice president consumer lending, United Bank Physician Retention in CT (2014) Medical-school Residency Combined school/ grads retained completions retained residency retained CT 19.1% 34.7% 51.7% U.S. 38.5% 47.2% 66.8% S O U R C E : A S S O C I A T I O N O F A M E R I C A N M E D I C A L C O L L E G E S

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