Freedom Mortgage Review: Specialize in VA Loans But Offer Everything Else Too

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While Freedom Mortgage might not necessarily be a household name like Quicken Loans or Wells Fargo, the company often finds itself in top 10 lists when it comes to mortgage lending.

So they’re clearly no slouch in the home loan space. In fact, they recently celebrated their one millionth borrower, who happened to be a veteran living in Fishers, Indiana.

The borrower being a veteran was no coincidence because Freedom Mortgage specializes in government lending, including both VA loans and FHA loans.

It also wasn’t surprising that the borrower resided in Fishers, seeing that Freedom Mortgage is the second largest employer there thanks to its 2006 acquisition of Irwin Mortgage.

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The History of Freedom Mortgage

  • They were founded all the way back in 1990
  • Which is a long time for a mortgage company these days
  • Refer to themselves as 5th largest mortgage provider in the U.S.
  • The company’s main headquarters are in Mount Laurel, New Jersey
  • With wholesale lending operations in Fishers, Indiana
  • Have made a series of major acquisitions in past several years to grow company

Freedom Mortgage, which was founded in 1990, bills itself as one of the country’s largest full-service mortgage bankers, with a specialization in government-insured home loans.

By full service, they mean offering mortgages via a variety of different channels, including retail, wholesale, and correspondent.

That means mortgage brokers can resell their products to consumers, and smaller mortgage bankers can offer their programs to borrowers via the correspondent channel.

Then of course they have the consumer-facing retail channel thanks to their army of mortgage loan officers positioned across the country.

5th Largest Mortgage Provider Nationwide

  • Freedom claims to be a top-5 mortgage provider
  • Recently was #1 in the nation for VA loans
  • And #2 in FHA loan origination
  • Also making strides in USDA lending after acquiring Chase’s rural loan business

At last check, they claimed to be the fifth largest provider in the United States, with licenses to do business in all 50 states, including DC and Puerto Rico. This despite being a non-bank, meaning they don’t take in to deposits like the big banks do.

However, they’ve been growing larger and larger thanks to a series of major acquisitions, including the purchase of Chase’s Rural Housing Business in 2016. This made them a major USDA loan player.

Since 2014, they’ve acquired a ton of companies and/or their assets, including Continental Home Loans, New York Community Bank, BluFi Lending, and Sterling National Bank.

The company also added 40 retail branches to its operations in the western U.S. thanks in part to acquiring Ontario, CA-based First Mortgage Corporation.

They’ve now got physical branches in states like Arizona, California, Hawaii, Nevada, New Mexico, Texas and Utah, and a total of 100 nationwide.

What Freedom Mortgage Offers

  • They specialize in VA loans
  • But also offer FHA loans and USDA loans
  • Along with conventional offerings and Fannie/Freddie stuff
  • Including both conforming and jumbo loan amounts

We know they’re a big company and growing. Now let’s discuss what they offer in the way of home loans.

Their main focus appears to be VA loan lending. In the first quarter of 2017, they were actually the top VA loan lender in the nation with $2.7 billion in volume during those three months alone.

Despite VA loan volume dropping industry-wide during that time, Freedom Mortgage was able to boost originations and grab 6.2% of total market share nationwide.

They managed this thanks to mortgage refinancing, which accounted for 75% of their VA loans originated during that quarter.

Aside from VA loans, Freedom Mortgage also originates FHA loans and USDA loans. Per Inside Mortgage Finance, they were the #2 FHA lender by volume recently.

And per the USDA, they were a top-10 USDA lender. So it’s very clear that they have a major presence in the government home loan arena.

For both VA and FHA loans, they allow FICO scores as low as 500, which is very low indeed. For USDA loans, they require a minimum credit score of 620.

They offer streamline refinances for all those loan types, and HARP if you happen to be underwater on your home loan.

In terms of conventional loan offerings, they offer loans backed by Fannie Mae and Freddie Mac, including the newer 3% down payment options.

And they offer jumbo home loans with loan amounts as high as $2.5 million via their Premier Jumbo loan program. However, a minimum credit score of 700-740 is required depending on the attributes of the loan.

Speaking of credit, those who are able to meet ability to repay rules but don’t fit conventional or government underwriting guidelines for one reason or another can take advantage of the company’s Freedom Solutions product line.

The non-QM suite includes expanded debt-to-income ratios, a bank statement documentation option, and recent credit events like foreclosure are permitted.

They also have a renovation lending division and are a leading purchaser of such loans. As such, they can offer flexible guidelines and plenty of options.

Like other mortgage lenders, they offer home purchase loans and refinance loans, including cash-out refinances.

And they offer a wide array of loan programs from adjustable-rate mortgages to fixed mortgages, including 5/1 ARMs, 7/1s, 10/1s, and more. You can also get an ARM via their FHA and VA loan programs if you so choose.

Their fixed mortgages come in 15, 20, 25, and 30-year loan terms, providing plenty of flexibility for all types of homeowners.

Freedom Mortgage Rates

  • They don’t advertise their mortgage rates
  • So my guess is as good as yours
  • All you can do is get a quote and compare it to other lenders’ rates and closing costs
  • My assumption is they are industry average

Like a lot of other lenders, they don’t openly advertise their mortgage interest rates on their website or elsewhere, which makes it impossible to know where they stand there.

Of course, they offer mortgages via several different channels, so their rates may vary depending on whether you get a mortgage from them via the retail, wholesale, or correspondent channel.

My assumption is that their rates are industry average, though that’s nothing more than a guess. If and when they share their rates, I’ll add some more coverage here.

VA Loan Churning Controversy

  • In mid-2018 they faced allegations of loan churning
  • Where lenders serially refinance borrowers whether it benefits the homeowner or not
  • In order to make large commissions on the transaction
  • They faced restrictions from Ginnie Mae in terms of securitizing these loans

As mentioned, Freedom Mortgage is one of the larger VA lenders out there.

In mid-2018, Freedom Mortgage got caught up in the VA loan churning debacle where lenders were essentially accused of unnecessarily refinancing borrowers into new loans in order to make large commissions.

For example, refinancing a brand new loan by some nominal amount, say .25% lower in rate, but charging borrowers thousands in the process.

Aside from harming homeowners who may have not benefited much if at all from a refinance, it also meant MBS investors were getting a raw deal when the loans packaged into securities were constantly being paid off via a fast refinance.

Because of the accusations, Freedom Mortgage was restricted from creating Ginnie Mae (GNMA) multi-lender pools with VA loans, along with two other GNMA issuers.

Freedom says it has since been working with Ginnie Mae to ensure its prepay speeds (how quickly mortgages are paid off via a refinance) are in line with those of other lenders to remain in compliance.

The takeaway here is to do your homework and know what you’re getting into, no matter which lender you choose to work with.

You should know if a refinance or particular loan product is suitable, instead of simply taking a lender or loan officer’s word for it.

In other words, do your due diligence to avoid getting taken for a ride.

Thoughts on Freedom Mortgage

  • They might be a good place to get a VA loan or other government loan
  • Because they seem to be experts in that space
  • But keep an eye on interest rates and closing costs and be sure to shop around elsewhere
  • Their lack of perks and technology might be a shortcoming

They certainly offer a wide variety of loan programs, and seem to be specialists when it comes to government lending.

That means they probably have higher success rates when it comes to closing these types of loans, perhaps if there are some hurdles to overcome.

The scandal involving loan churning is something to consider, though hopefully it’s behind them and they’ll be more careful when determining if a borrower will benefit from a refinance.

However, due to Ginnie Mae restrictions, their pricing may suffer if they aren’t able to pool the loans in the most profitable way. That could be passed on to borrowers.

As noted, I don’t know anything about their mortgage rates or closing costs for that matter, so it’s impossible to know where they stand pricing-wise.

Clearly that’s a very important piece of the pie, though sometimes just getting the loan to fund is enough.

Lastly, they don’t seem to have much going on technology-wise, such as an app or paperless process (or at least they’re not advertising it). But I’m sure that’ll come soon enough to match their peers.

As of July 15th, 2014, Freedom Mortgage began in-house servicing for all newly originated loans, meaning you won’t have to worry about them transferring your loan to some unknown company after it funds.



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