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Mortgage company Mason-McDuffie expands in tough times

Mason-McDuffie Mortgage Corp. has become a rarity among home lenders: It's managed to navigate toward expansion through the shoals of a vicious recession.

Despite the downturn, the East Bay mortgage company has been completing a rising volume of loans and has also added employees as it expands.

San Ramon-based Mason-McDuffie also has prospered by capturing some of the mortgage business that was relinquished following the failures of IndyMac, American Home Mortgage, Countrywide, Washington Mutual and other lenders.

"We are constantly expanding," said Herb Tasker, chairman of Mason-McDuffie. "We are opening new offices and hiring people."

Total revenue is expected to be in the $760 million range during 2009 for the privately held company.

Through the first nine months of 2009, Mason-McDuffie completed 2,073 loans with a total value of $503 million.

So far in 2009, the completed loans are running 41 percent higher than the loans that were completed in all of 2008. The total value of the loans during the first nine months of 2009 is 44 percent higher than the company's $350 million in loans for all of 2008.

The increased business has been going on for the last few years. In all of 2007, Mason-McDuffie completed 1,050 loans with a total value of $241 million.

Steady growth wasn't always a foregone conclusion for Mason-McDuffie, whose roots in mortgage lending extend back to 1887.

By 1982, Mason-McDuffie had amassed the sixth largest mortgage portfolio in the country. That was the year Weyerhaeuser Mortgage Co. bought certain assets of Mason-McDuffie. Weyerhaeuser bought the rest of Mason-McDuffie in 1984.

That produced a two-decade period during which the Mason-McDuffie name vanished from corporate circles. A few years ago, the name became available again and Tasker called his former associates to ask if they wanted to resurrect the company with the old shingle.

That was 2005, when several original partners who were with the company prior to the Weyerhaeuser purchase, including Tasker, Marilyn Richardson and Bill Godfrey, formed a joint venture to re-launch the Mason-McDuffie company.

Since the rebirth, operations and the company's sales have taken off:

  • Around the time the current company was founded in 2005, Mason-McDuffie had a dozen employees. It had 60 at the end of that first year, and was operating in California, Arizona and Colorado.
  • The company employed 109 in 2006, 120 in 2007 and 206 in 2008.
  • At the latest count in 2009, Mason-McDuffie employed 242. It operates in California, Colorado, Oklahoma, Indiana and Hawaii.

The company in its expansion brought on board numerous veterans of other companies.

"We have attracted people from all over," Tasker said. The company got loan officers, underwriters, loan closers when other companies went out of business or closed some branches.

To nurture the reincarnation, the founders of the new version of Mason-McDuffie deliberately sought out people who were known quantities.

"A lot of people who have worked for us in the past have come back to the company," Tasker said.

In numerous cases, the employees that Mason-McDuffie brings on board are people who have a loyal following of customers. The new hires often bring in considerable business.

"That helps us make an impact immediately," Tasker said.

Mason-McDuffie also decided to focus on providing loans that would qualify for FHA (Federal Housing Administration) financing.

The collapse of the subprime market has created additional opportunities for Mason-McDuffie, said Richardson, the mortgage company's president and chief executive officer. Richardson was a key executive in the prior Mason-McDuffie firm, along with being a co-founder of the new version.

FHA loans have become an attractive alternative for providing loans to first-time home buyers whose credit is less than stellar, she said.

"We are very proficient in handling FHA financing," Richardson said. "That is really the product of choice for the last couple of years."

As a result, Mason-McDuffie has been able to steal a march from some rivals. In non-military terms, the mortgage provider is capturing market share.

"We were able to continue doing loans at a time when some of our competitors were struggling," Richardson said.

The company's expertise in FHA financing helps it process these types of loans faster than some rivals, she added. Richardson says the company also tends to be a little "overstaffed." Mason-McDuffie is betting the higher staffing levels will help it gain market share.

To be sure, Mason-McDuffie has undertaken several strategies that it believes have helped it prosper in the lousy economy. Yet the best move, perhaps, is one that the company didn't take.

Mason-McDuffie has managed to dodge hobgoblins that have haunted the mortgage and real estate industries and ushered in the collapse of those sectors in recent years.

"We didn't do subprime loans at all," Richardson said. "That really saved us."