Magazine article Mortgage Banking

Mason-McDuffie Is Bullish on Growth

Magazine article Mortgage Banking

Mason-McDuffie Is Bullish on Growth

Article excerpt

During the last several years, our industry has been roiled by the economy, the housing crisis and the resulting imposition of oppressive new regulations.

The situation has resulted in some huge national players--most notably New York-based MetLife Home Loans--leaving the mortgage business entirely, while others such as Charlotte, North Carolina-based Bank of America is reducing its commitment to some markets. Meanwhile, Wells Fargo Home Mortgage, Des Moines, Iowa, a division of San Francisco-based Wells Fargo & Co., grabbed a huge percentage of the overall mortgage market.

As the interest rates remain at historic lows and the tepid recovery continues, many large lenders are taking advantage of the refinancing wave, while shrinking or standing pat with current staff These companies are following the economic cycle--the traditional business response to challenging times.

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So, why, in this environment, have we at Mason-McDuffie Mortgage Corporation decided to aggressively expand our branch network? it's contrary to the economic trends and to a housing market that has been slow to rebound in many areas of the country.

And it's also contrary to the way we have operated since we opened the third iteration of Mason-Mclluffie in 2005. By the time our team closed its first loan in July 2006, the housing bubble had started to pop.

We grew the company organically and quite carefully, locating new branches where there was the right mixture of experienced staff who shared our values in a desirable market.

The firm enjoyed steady growth until 2010, when volumes suddenly went in the wrong direction. We evaluated our situation, as a firm with about 200 employees, in-house processing and branches in six states. We had a reasonable presence in Northern California, but needed to expand into other markets.

Our platform had been well tested and we believed it would scale with a national expansion. During our slower growth period, we maintained plenty of in-house processing and underwriting staff so we could consistently serve our loan officers and their clients quickly.

We also had (thanks to our Tulsa, Oklahoma, office) developed considerable expertise in underwriting Federal Housing Administration (FHA) loans--a competency that would be very helpful when the private market went away.

Despite our size, we also ranked in the top 25 mortgage banking firms nationally in the number of 203(k) loans we originated. Some of our offices have loan officers who have developed particular expertise and teams to process 203(k)s.

Obtaining our Ginnie Mae approval to issue Ginnie Mae pools and begin retaining some servicing has helped us provide programs like the 203(k)s, when other companies have reduced their mortgage programs.

We had felt the unrest in the industry, like most firms, losing a few high-performing branch managers to bigger companies offering salaries when the compensation rules changed last year.

It should be noted that a number of us had grown other mortgage firms (earlier Mason-McDuffie companies as well as All Pacific Mortgage) to national footprints. It wasn't a new challenge for our executive team, although it was a 180-degree change in direction from the way we had managed the firm.

We decided to swim against the tide and expand dramatically from coast to coast starting in summer 2011. As one of my executive colleagues put it, we decided to run between the legs of the elephants. …

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