Acra Lending’s 2023 has been smooth sailing thus far, having started the year by settling into an exciting new office location. Their new full-floor office is just minutes from the Irvine Spectrum center in Orange County, CA, a vibrant shopping, entertainment, and lifestyle hub, making it an ideal location for Acra Lending’s operations.
The past year has also brought explosive market growth for the lender. The skyrocketing interest rate surge that began in 2022 dramatically altered the landscape of the Non-Qualifying Mortgage (Non-QM) market, but Acra Lending was able to push through the uncertainty and emerge on the other side.
“There has been a lot of consolidation in the Non-QM market,” says Keith Lind, CEO of Acra Lending. “Those who were able to weather the storm, like we did, captured a lot of tail winds. There are a lot fewer players and competition.”
2023: The Year of Tech
Lind knows a thing or two about weathering storms. He came to Acra in 2020 under its former name – Citadel Servicing Corporation – as its Executive Chairman and President mere weeks before the widespread COVID-19 pandemic lockdowns.
Citadel became Acra Lending in January 2021, and in March 2022, Lind ascended to CEO. Today, Acra operates in 39 states and Washington, D.C., offering programs through four verticals: wholesale lending, investor lending, correspondent lending, and consumer direct lending. The company’s expertise in tailor-made Non-QM mortgage products and focus on exceptional customer service has earned them the title as one of the top lenders in the United States.
Lind takes pride in Acra’s remarkable strides in efficiency over his tenure as CEO. He envisions even greater achievements ahead fueled by the company’s commitment to integrating cutting-edge technologies into its workflow. One of their priorities involves harnessing the newest loan origination system (LOS) technology.
“Real estate is the biggest business in terms of nominal dollar values in the world; nothing carries more market value, but the technology is so behind,” Lind says. “So, we are tearing apart the processes we have, seeing what makes sense, what doesn’t, what we can improve on, and creating better processes with better technology in each division.”
With new builds still moving at a snail’s pace following the supply-chain issues post-pandemic, as well as many properties aging past the 40-year mark in the US, the fix-and-flip industry is on the rise. In 2022, 8.4% of all home sales were fix-and-flips, compared to just 5.7% of sales in 2017.
Lind says their new LOS technology will be focused on bridge loans and fix-and-flip investment opportunities to match the growing demand.
Another facet of Acra’s tech expansion focuses on Artificial Intelligence (AI). Lind says neither he, nor anyone else in private lending, should fear some version of ChatGPT taking over the Non-QM industry anytime soon. However, he does believe that automation will play a big role moving forward.
“We’ll be implementing [AI] into the information we’re receiving to ensure it’s consistent throughout documents,” Lind says. “That’s where AI will do its work – in the loan set-up and loan intake processes. It’s all new tech, but nothing is going to replace the most important thing on the private lending side, and that’s human talent.”
Strength in Numbers
Human talent posed a monumental problem for many lenders as the world emerged from the worst days of the pandemic. Non-QM firms were snatching up talent in a rush to stabilize after being dormant for most of 2020. Acra’s headcount totaled 260 in February 2020 and had dropped down to 160 just six months later. Employee headcount now sits at 300 with the company funding around $225 million per month as of June 2023.
“We’re much more efficient because we’re always improving our processes and we’re investing in human capital,” Lind says. “The talent pool today is huge. Now we’ve got all-star underwriters and our pipeline is growing.”
“If you had asked me if we would be funding $225 million a month with our pipeline at 8.5% when it was at 4% in 2022, I would have thought you were crazy.”
The Road Ahead
Remarkably, the growth that highlighted the first half of 2023 came before the company was done implementing its new tech. Lind believes that Acra is going to stay at the forefront of the Non-QM space going forward by continuing to stick to its fundamentals and implementing efficiency at every opportunity.
“We’ve been profitable every month and every quarter,” he says. “We’ve kept rates high, and we’re not chasing the market because we don’t need to. This is no time to try to drive volume by having rates lower than other people. If you have consistent service, you’re funding loans, and you have the liquidity to sell loans, that’s a win in today’s market.”
