Personal touch
Mortgage company executive says face-toface service makes the difference.
James Van Ste en house, CEO of Houston-based Inter Linc Mortgage Services, has spent his entire career in the mortgage industry. He became president of Inter Linc at the time of its inception in 2004, andin2010, after the housing market crash plunged the economy into recession, he purchased the company and became its CEO.
During his time at the company, Van Ste en house grew the firm from four employees in Houston to 425 in 18 states. Last year, it produced morethan$1.3 billion, up from less than $10 million in 2004.
Now, Van Ste en house is eye ing future growth while focusing on what he thinks has made his company so successful: Its focus on first-rate employees and face-to-face interactions with clients.
Q: You’ve been in this business your whole life. What do you find most rewarding in this industry?
A: I’m what is classified as an independent mortgage banking institution. In 2010, independent mortgage bankers represented about 10 percent of (mortgages) originated in the U.S. Fast forward to 2016, we’re approaching 50 percent. You’re seeing the trend fall from the financial institutions to the independent mortgage bankers for a couple different reasons. One is that there is a lot of regulation and oversight that has been put on the banks. But we’re also finding is that we have the ability to provide better service to the clientele, and the public is starting to figure that out. When you’re buying a home, it’s the single largest investment you’ll probably make in your entire life, and no matter how automated the process is, people have a lot of questions and want to talk to a real person who understands their questions. Big institutions, for whatever reason, have sometimes gotten away from that.
Q: In what ways did the recession and the ensuing financial regulation impact your business and the industry more broadly?
A: It’s had a tremendous impact on the business. We never dabbled in the subprime arena as an organization, but we were certainly able to see the ramifications that came from that. The pendulum swings, as it typically does, in our regulation environment. It’s either far to the right and really loose, or far to the left and really tight. For our organization, our No. 1 mission is just tobe compliance-bulletproof. There’ s a tendency to talk about overregulation and how burdensome it is, and that is a factual statement from a financial perspective. In 2010, it costs us roughly $1,900 to originate a mortgage loan from start to finish. Today, it costs nearly $7,100. That additional cost, unfortunately, gets passed on down the line, but that’s what it takes now to maintain and be compliance-bulletproof all the way through the process.
Q: Do you expect the new administration will do much to change Dodd-Frank?
A: It’s a little too early to tell. You’re starting to hear trickles now about cutting back on Dodd-Frank. You’re starting to see bank stocks rise … and maybe some slices on the Consumer Financial Protection Bureau in terms of having a single director and (making it) more of a panel. But the bottom line is this: I don’t think, at least I would hope, that we would never be foolish enough to go back to where we were, but potentially smart enough to take a real hard look at the regulations and find out which ones of them really matter. If it’s easier for a qualified home buyer to get into a home and create home ownership, that’s the ultimate goal. Home ownership, as a national statistic, is at a very low point right now. But there is no greater disservice than to provide a financing arm to someone who cannot withstand the long-term effects of a 10-year, 15-year, 20year or 30-year mortgage. There is a way to do it properly.
Q: How much do you expect the company to grow in the coming years?
A: In 2014, the organization did just under $600 million in production. In 2015, we did just over $900 million in production. And in 2016, we eclipsed the $1.3 billion mark. That growth is a testament to the professionals who work here and a testament to the path that we have chosen. There is a large segment of individuals who are purchasing homes who want that type of service. Our goal this year is to eclipse $1.5 billion in production, and we see that running up to about $1.8 or $1.9 billion in 2018.
Q: To what degree do you expect mortgage rates to rise this year?
A: We never expected rates to stay this low for as long as they did. The rates this year are probably going to tweak up a little bit. If you take a look at what the economists are saying, they’re projecting you could (get as high as) 5.25 percent. On the flip side, you’ve got economists… that say they’re expecting 6 percent by 2020. If rates are going to be 6 percent, that tells you that between today and 2020, rates are going to be extremely attractive. Interest rates are important, it’s the big buzz word in the marketplace, but the bottom line is that people have always bought homes. You just have to provide the best service.