Bucking the Trend By Lesley Geary
Over 13 years ago, Metrocities Mortgage co-founder and CEO Paul Wylie bucked the refinance trend and decided to pursue a little known business model–mortgage joint ventures–which has increased business and added profits for its real estate partners.
“A lot of the competition thought we were crazy,” says Wylie. “There was a lot of refinance activity and we wanted to pursue long-term purchase business in a way that hadn’t been focused on in the past.”
As a result of this direction, these days, his competitors are more likely to refer to Wylie as a visionary.
Since that prescient decision, Metrocities Mortgage, which is headquartered in Sherman Oaks, California, has carved out a profitable niche, creating joint ventures with real estate firms and others to provide “in-house” mortgage loans to home buyers. The national direct lender has grown from six employees in 1990 to more than 1,400 in 2005, and loan production surpassed $10 billion last year.
Wylie says one of the keys to Metrocities Mortgage’s success is that it is almost exclusively focused on providing joint ventures and as broad an array of mortgage products as possible. As a result of its unique approach to business, the company was named the 2005 “Most Innovative Mortgage Company” in America by Inman News.
“The typical large corporate bank may offer 35 different products, but at Metrocities, we are unique in that we can offer over 7,000 different types of programs,” Wylie says. “We like to think that we leave no stone unturned, with the best possible fulfillment.”
Wylie explains that Metrocities is able to offer such a variety of loan products because it is a mortgage banker as well as a mortgage broker, offering its own programs and guidelines as well as offering other lenders’ programs.
The company also maintains an organizational structure that differs from its peers. “Everything in our company is positioned to best support our joint venture model,” Wylie says. “This allows us to fully service our clients in a manner which ensures that the maximum amount of profit is returned to the partner.”
What’s more, its core strategy of forming joint ventures has served to “enhance new sources of loan volume, making the company somewhat impervious to the fact that the refinance market is flattening,” says John Stewart, Metrocities’ president of its western division.
Indeed, Metrocities’ first-quarter business was up 24% this year over the same period last year because of the continued growth of its joint venture relationships, and refinance business is secondary to its new loan business.
“You will find,” Stewart says, “with some of the big national brands, they are all over the place; they may have corporate concerns like, ‘have we cross-sold enough life insurance?’ But that’s not us. Mortgages are Metrocities core business—not just another division of a behemoth. And we wake up every day and think, ‘how can we be a better partner and improve our business model?’”
To that end, the company prides itself in providing what it calls “Heroic Customer Service(SM).”
“We offer a Heroic Customer Service guarantee, which ensures that deadlines are met, and part of that guarantee is our ‘Pathway to the President’,” Stewart says of the company’s service-level guarantee. “If someone is not getting the service he or she believes he or she deserves, they can easily escalate the situation all the way to the president’s office.”
In fact, “I helped a family just the other day where things had gone significantly sideways and I jumped in and got everything ironed out,” he says. “We don’t say, ‘we’re sorry we couldn’t get it done’ for some reason or another. We will move mountains to make sure our clients get the best possible loan packages at the best possible rates.”
This type of service was awarded last year when Metrocities received the CustomerSat ACE Award for mortgage borrower satisfaction.
“Ninety-three percent of Metrocities’ clients responded that they either ‘definitely will’ or ‘probably will’ recommend us to their friends,” Stewart says. “That’s higher than the industry average of 82 percent.”
Metrocities is also focused on continued growth. Already well established in the Western states, it is the job of Eastern Division President Arthur Ringwald to grow the business in that area.
“We have hired some superb talent in the East and we have gone from six joint ventures with firms in the East to 62 very significant joint ventures in the last year alone,” he says.
Ringwald, who says he is pleased with the company’s progress in the East, believes the key to Metrocities’ success is that its main focus is providing a wide range of mortgage options through its joint ventures. The company is now looking for new Realtor partners from New England to the Carolinas, and also in Texas.
“We are firm believers in our main focus,” he says. “We focus all of our energies on this one product, on this one thing. We’re not any smarter than anyone else, but it is all we do, so naturally, we are better at it.
“We also provide great service because we are lean and mean,” he continues. “Any one of our customers can pick up the phone and call John Stewart or me to effect change—how often does that happen when working with a gigantic firm? You just can’t get things done as quickly as we do. We are lean and we are nimble.
“We look like Realtors,” he adds. “The advantage is we work with the people. Our loan officers are there in the real estate office and we work side by side with our agents so you can sit down with one of them and also get a great loan officer who can provide an amazing choice of loan products. This relationship also provides the real estate agent with greater control over the transaction process by virtue of having a mortgage resource in-house that really delivers.”
Metrocities’ plans for the future are to stay the course, according to Wylie.
“Our new purchase lending has increased every year for the last 10 years in a row,” he says. “Metrocities’ goal is to keep that trend going.”
For more information, please visit www.metrocitiesaba.com. |
