News & Events

Mason-McDuffie is Bullish on Growth

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 Met Life—leaving the mortgage business entirely, while others such as Bank of America is reducing its commitment to some markets. Meanwhile, Wells Fargo 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 re-financing wave, while shrinking or standing pat with current staff. These companies are following the economic cycle, the traditional business response to challenging times.

So, why, in this environment, have we at Mason-McDuffie Mortgage decided to aggressively expand our branch network. It’s contrary to the economic trends and 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-McDuffie 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 can consistently serve our loan officers and their clients quickly. We also had, thanks to our Tulsa office, developed considerable expertise in underwriting 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 203K loans we originated. Some of our offices have loan officers who have developed particular expertise and teams to process 203ks.

Obtaining our Ginnie Mae approval to issue Ginnie Mae pools and begin retaining some servicing has helped us provide programs like the 203ks, 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 flow and expand dramatically from coast-to-coast starting in summer 2011.

It was as one of my executive colleagues said—we decided to run between the legs of the elephants. We may not be big, but we can be nimble.

Since that decision, we have realigned our management structure and added executive positions for three more senior vice presidents of production. Three are geographically spread across the country and two are based in our San Ramon, CA home office. This team is driving our expansion and we now have offices from coast-to-coast and are licensed in 30 states.

We also have added regional vice-presidents and plan to add a second processing center, probably in the Eastern Time zone when loan volume warrants.

Mason-McDuffie is about one year into the plan so it’s fair to ask how we’re doing.

We have branches in five new states and, with the Richmond, VA office, now stretch from seaboard to seaboard. We also have significantly expanded our California footprint with five new offices in Southern California as well as additional offices in the San Francisco Bay Area.

What’s driving our expansion is the uncertainty in the industry. It’s doubtful that MetLife loan officers expected the company to leave the business entirely. We’ve added a couple of very successful loan officers from MetLife and are continuing, through our senior vice presidents of production team, to work with others.

The key for Mason-McDuffie has been that we’re privately held and thus answer only to ourselves—not to outside investors looking for a return. The decision to grow with internal funds allowed us to decide that exceptional service to the loan officers and the clients was going to be a core value and we chose to staff our processing and underwriting teams to achieve a 21-day turn-around or quicker.

Our executive committee comprises the majority of the investors in Mason-McDuffie, which allows us to make decisions quickly and adjust to changes in the market. When we launched the firm six years ago, we obviously had no idea that we’d encounter the deepest real estate recession that any of us have seen in careers that have been 40 and 50 years long.

We’ve taken the long term view because we do not intend to sell the firm once we achieve the national footprint.

As we’ve grown and profits allowed we have invested significantly in technology—again to make our loan officers’ jobs as easy as possible.

The next step in that process is becoming a paperless firm—a project that is on track for implementation in the third quarter or sooner.

The challenge for our technology folks, who also handle all training as well as social media strategy for the company, is that the processing and underwriting teams are dealing with record loan volume each month as we continue to expand. So, the training and implementation must be phased so production levels can be maintained and increased each month.

As you can imagine, we have our hands full as we strive to grow our way into consistent profitability while maintaining the core values that have characterized the Mason-McDuffie brand, which dates to 1887 in the California real estate business.

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Herb Tasker is the founding CEO and currently serves as chairman of Mason-McDuffie Mortgage. Earlier in his career, he has been CEO of Mason-McDuffie Mortgage as well as All Pacific Mortgage. He is a past-Chairman of the Mortgage Bankers Association.