Wholesale mortgage specialist ClearVision Funding is planning to double its workforce and lend more in 2014, filling a gap in homebuyer demand as larger commercial banks exit or pull back from mortgage lending.
Santa Ana-based ClearVision has closed about $3 billion in loans since its inception in mid-2010. It expects to nearly match that with $2.8 billion worth of loans this year, spread over 10,000 mortgages, according to President Jon Maddox.
“With technology, things become exponential,” said Maddox, a 40-year veteran of the mortgage financing industry. “[Business] multiplies faster and becomes more saturated the bigger and more successful you are. Part of that has to do with momentum.”
ClearVision’s workforce has grown about 54% over the past year, to 200 or so employees. Most of them work in its 35,000-square-foot headquarters, and about 40 are in its Charlotte, N.C., office.
Maddox said the company expects to increase its workforce to about 400 employees this year.
“When you first get out in the marketplace, you’re new, and you just don’t get the lion’s share of the business,” said Executive Vice President Steven Curry. “Once you prove to them that you can perform, you get more of their business. That’s kind of the place we’re in right now. We’ve developed very strong relationships with large mortgage brokers across the country … and we’re bringing up a larger proportion of business per person.”
Closely held ClearVision does not disclose specifics on financials, but Maddox said it’s had 14 consecutive quarters of profitability since it opened.
The company is part of Dallas-based Pacific Union Financial LLC, a mortgage banker that’s expecting to close about $10 billion in loans this year through its various lending units. Pacific Union’s sole shareholder is Evan Stone, who founded the company in 2004.
Rising mortgage rates throughout 2013 have dampened profitability for a number of commercial banks that count on mortgage-related reven-ues.
Banks that have downsized or halted their mortgage units in OC include Wells Fargo, which announced in August plans to lay off 330 employees from its Costa Mesa and Santa Ana offices; JPMorgan Chase, which said it would cut 245 jobs in its mortgage unit in Irvine; and Costa Mesa-based Pacific Mercantile Bancorp, which recently decided to stop making retail loans following its 2012 exit from wholesale lending.
Such moves have opened up opportunities for ClearVision to hire and grow its business, according to Curry.
“Hiring in 2013 [was] excellent,” he said. “There have been fairly large banks that laid off quite a few people here. We’ve been lucky enough to hand-pick the best and employ them.”
ClearVision, while it provides refinance services, is “squarely focused” on the purchase business and counts on the latter to be the main driver of revenues.
“We started out knowing that the refinance business is fleeting,” Maddox said. “We’ve made a conscious effort to focus on the purchase business and to hire people who have those relationships.”
Maddox said ClearVision’s exclusive focus on home loans is a key driver of the company’s growth despite changing economic and regulatory environments.
“A mortgage banker does not have all the bells and whistles,” he said. “We don’t take deposits. We don’t make car loans, boat loans, credit card loans. So we are specialists at [mortgages]. That’s all we do. We’re not going to go in and out of the market.”
Orange County is home to a cluster of mortgage lenders that weathered the recession and grew rapidly as the housing market began to recover with the aid of low interest rates.
Among the largest here and nationwide is Santa Ana-based Stearns Lending Inc. The company, founded and headed by Chairman Glenn Stearns, has funded more than $25 billion during the past three years. It has more than 1,500 employees total.
Impac Mortgage Holdings Inc. in Irvine saw substantial dips in business during the recession but held on through other services that generated fee-based revenues. The publicly traded company, which had a recent market value of about $55 million, last month announced it is selling 23 retail branches to an unnamed competitor. It had a loss of about $5 million on $93 million in revenue through the first nine months of 2013.
The mortgage industry is set to see “a whole list of regulatory changes” this year, Curry said, including the implementation of the Truth in Lending Act that took effect Jan. 10.
Lenders are required, under the Consumer Financial Protection Bureau regulation, to “assess the borrower’s ability to repay” residential mortgage loans based on certain “qualified mortgage” standards.
“We’re kind of tied at the hip with the [regulators],” Curry said. “We work with all the updates and new regulatory procedures that are required for lenders out there, everything from the way the loan is disclosed … to the way we have to service the loans. That will all change as regulators see fit.”
