NOV 25, 2013 11:51am ET

Guild Mortgage Targets Southeast On Way to Becoming $20B Servicer

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Having established a strong foothold in South Carolina, Guild Mortgage is rapidly expanding in the Southeast as part of its plan to be a nationwide lender. It has three-year goals of amassing $20 billion in servicing and doing $10 billion a year in originations.

Through the first nine months of 2013, the company’s seven branches and 60 employees in South Carolina generated 1,153 loans totaling almost $200 million. That’s up fromseven employees and nine loans totaling $1.1 million in June 2012, when it opened its first branch in Spartanburg.

Guild opened its eighth office in Charleston on November 15. In addition to Spartanburg, it also has offices in Greenville, Georgetown, Hilton Head, Myrtle Beach and Columbia.

It’s now targeting North Carolina and Georgia.

Now in its 54th year of existence, only recently has San Diego-based Guild set its sights on becoming a national lender. The company now has more than 170 branch and satellite offices in 16 states but expects to be in almost all 50 states within the next three years.

Mary Ann McGarry, the company's president and chief executive officer, says the company's goal is to have $10 billion in originations and $20 billion in servicing by then. That's up from $6.5 billion in originations and $10 billion in servicing in 2012. Headcount has grown from 400 in 2008 to about 1,800 currently.

Guild has actually been around since 1960, when it was founded to help customers finance purchases of single-family homes built by American Housing Guild, a San Diego-based homebuilder. Martin Gleich, Guild's founder, sold the mortgage company in 2008 to a group of senior managers, which owns 25% of the company, and McCarthy Capital Corp., an Omaha,Neb.-based private equity firm, which owns the rest.

Guild targeted South Carolina to take advantage of what it saw as favorable future market dynamics in the state: the end of the recession, decreasing unemployment rates, pent up housing demand and an improving economy.

Many customers in South Carolina are first-time homebuyers, the company’s specialty niche. Government tax breaks, downpayment assistance and state foreclosure prevention programs backed by the federal government have made purchases realistic in the state, Guild says. In September 2013, housing sales were up 17% over the previous year and demand is expected for 8,800 new homes to be built in the next three years.

“We are optimistic about the rest of 2013 and 2014 based on recent economic and housing trends,” McGarry says. “This includes indications of a steady increase in the number of first-time homebuyers, which can contribute to the nation’s overall economic recovery and growth in South Carolina.”

Guild’s Southeast expansion is being headed up by Matt MacGillivray, a former Bank of America mortgage executive who headed the bank’s Columbia office, its top producing branch in the country for 15 straight years. Hired by Guild in 2012, he brought with him a team of five sales managers with a combined experience of more than 90 years in the mortgage business. Many of Guild’s South Carolina employees are former B of A people.

Guild remains focused on first-time homebuyers, just as it has since the days of Martin Gleich, who died in 2011. The company was a pioneer in Federal Housing Administration loans, and FHA lending continues to be its bread and butter.

“We think investing extra time to help the first-time homebuyer is well worth it,” said McGarry. “The quest for homeownership continues to be the American dream. The first-time homebuyer is entering a complex, often time-consuming and confusing process, so they deserve extra focus and attention.”

Guild gets about 90% of its business through its retail channel, centered on its relationships with real estate agents and builders. The rest comes from wholesale, a direct lending channel for providing refinances to its servicing customers, and a correspondent channel, which started two years ago.

Rather than targeting specific markets to move into, Guild looks for talented people, wherever they may be, who fit its entrepreneurial culture, are leaders in their own markets, and possess high integrity.

McGarry feels the company has grown because of its core principles, history of strong customer service, industry leading technology and a vision that emphasizes expertise and a focus on purchase business over refis.

George Yacik has been covering the residential mortgage business for more than 20 years and writes frequently for industry publications. He can be reached at gyacik@yahoo.com.

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