Weathering the Storm

Few privately owned mortgage companies could say they've rebounded from the housing market turmoil of 2008. Even fewer can boast that the future looks bright in an uncertain economy.

But one Timonium-based business can.

A recent merger between Greak Oak Lending Partners and 1^st Maryland Mortgage Corp has spirits at an all-time high in its Greenspring Drive office.

Pretty soon the office is expected to be teeming with 20 to 30 additional employees who may be hired to handle the firm's ability to process $25 million more in loans each month.

Josh Shein, the company's newly appointed president and chief executive, said the company's goal is to close $250 million in loans by the end of next year.

But how did this "small business," as Shein describes it, manage to survive years of plummeting housing prices?

It was a combination of conservative business strategy and calculated, measured growth, Shein said.

"We're not cowboys," he said. "We don't get crazy out there. A lot of my peers did do that. A lot of my peers really blew things up. They went crazy during the boom years but then they couldn't sustain that when things got tough.

"You saw the writing on the wall," he added. "It was too good to be true. We wanted it to go on. It was great, but you knew that wasn't going to go on forever."

During the down years, Shein and his partner Jeff Cooper "hunkered down and prepared for the worst."

Shein described the office as a "ghost town" used by only three employees. Together they had to lay-off staffers, renegotiate rental space and cut expenses like phone lines and office supplies. Shein said he was prepared to work from home.

"It was a once-in-a-generation, I hope, event. It was a bad event. But, it was one of those situations where if you knew you could come out of it on the other side there was going to be less competition [and] less sleaze because of more regulation," Shein said.

Great Oak's was founded in a modest executive suite in Columbia in 2001. In the last nine years the company has grown, extending its reach into seven states, with more offices currently in the pipeline for licensing. Last year, Great Oak originated about $200 million in loans for about 1,000 customers.

Holly Wirth, a Great Oak sales associate and Mays Chapel resident, said the office was excited about the merger, a move that is becoming increasingly common in the mortgage industry.

"Since I've been here, great things have happened. Just growing and getting more areas, bringing more people onboard that we can work with and help, we continue to extend our arms even further," she said.

Wirth is a relatively new hire after joining the company in June.

"It's a wonderful feeling knowing the amount of people that I helped and have changed their lives on a daily basis," she said of the company's long-standing reputation of reverse mortgage lending.

Reverse mortgage lending allows homeowners to tap into a portion their home's equity and convert it into cash. 

With the merger, a third partner has been brought into the fold. Les Millman, from 1^st Maryland Mortgage, will handle closings, while Shein and Cooper will handle day-to-day operations and production, respectively.

It's a growing trend for lending companies to find a mortgage broker mate to provide a one-stop-shop for its customers.

"More guys have either become a direct lender or become part of a bank, because it's becoming more necessary to survive in the industry," Shein said. "It's tougher to be a broker. No one wants a middle-man that doesn't have recourse."

The "back office" service provided by 1^st Maryland Mortgage was the most logical solution to advance in the lending market over night, Shein said.

"We brought the volume and the front end of the business. Put them together and it works out perfectly," he said.

The merger will integrate 1^st Maryland Mortgage Corp's seven employees with Great Oak's 58.

The company has sprung back proudly to the point Shein can offer employees incentive prizes like tickets to a football game. Last Friday, purple and black streamers lined the office, while some of the employees wore Baltimore Ravens gear.

"Everyone is excited to be a part of a growing company in a down industry, in a down time in the economy. … It's a testament that you're doing something right," Shein said. "At the end of the day we're still a local, Timonium-based business and that's a plus."