Is 68 years young the time to re-enter the wild and wooly world of mortgage banking? Answer: It is, if your name is Bill Starkey Sr. and you feel the current “down market” offers so much opportunity that it can’t be ignored.
“I just have an easier time managing mortgage loan officers than I do the Angus cattle on my ranch,” Starkey told me.
To be honest, Starkey isn’t really a new re-entrant to the business. He’s been back in for the past 18 months, after retiring three times over the past 10 years. (One of his favorite quotes is this: “There’s only so much golf I can play.”)
This industry veteran, a mortgage professional since 1969 (Lomas Mortgage in Dallas was his first employer), now plies his time as chairman of Highlands Residential Mortgage, Dallas, a nonbank lender with more-than-ample warehouse backing and a stated goal of becoming a top ten originator.
Starkey is, perhaps, best known for his days at AccuBanc Mortgage which he took the helm of in 1992 and then sold it for a handsome profit in 2000, but not before growing it into one of the largest nonbank residential funders in the nation. (He has two sons, both of whom have worked in the business.)
After AccuBanc he bought another small lender, grew that firm and then sold it in 2005, before engaging in one of his ill-fated retirements.
So why did he get back in? To him the answer is simple: He just likes being a mortgage banker—and he loves the business of lending people money and managing loan officers.
When I interviewed him last week, 30 LOs were in another part of the firm’s Dallas office, receiving training for their licensing paperwork. Starkey likes the idea of LOs getting a permanent ID number “because it stays with you forever,” something that will keep loan professionals honest and hardworking.
Asked whether he thinks nonbanks are a competitive disadvantage to depositories in the wake of Dodd-Frank Act, his answer is a quick “no.”
Highlands, he said, has no problems gaining the attention of well-heeled warehouse banks, partly because of his track record at AccuBanc. “We have more warehousers than we need,” he noted.
His take on running a successful operation boils down to this: “You hire the best people you can and work with them. The basics of this business has not changed. It’s all about blocking and tackling.”
On the surface, Highlands’ loan production numbers might look small at $35 million a month, but all that will soon change, he said. Recently, the lender bought the mortgage banking division of ViewPoint Bank, a deal that could boost Highlands’ production numbers significantly.
At this point, Starkey is estimating the firm’s residential fundings will grow to a run-rate of $700 million a year. In 2011 Highlands originated about $400 million—all retail.
Already, he’s looking at expanding into California and having the firm service its own mortgages. “Not only do we want to be a top five lender in Texas but we want to be one of the largest originators in the U.S.,” he said. “We want to be nationwide.”
Presently Highlands is licensed in 11 states which means the firm has 39 to go. If successful, Starkey could once again clean up in mortgage finance. After all, he owns the company and has no intention of giving a controlling stake to anyone.
