Q: Why did you start MegaStar?
A: Because the company I was working for was sold to a large corporation. I was a senior manager for mortgage banking. My family is all here, but my job offers were outside Colorado. My only choice was to create my own job.
Q: How is MegaStar different from a mortgage brokerage?
A: We have to have our own money to fund mortgages. We have to have a line of credit with a warehouse bank. We’re given the right to underwrite your loans and prepare your closing documents.
A broker doesn’t have a warehouse line. They don’t have their own money. A year ago, anyone could set up shop and call themselves a mortgage broker. The broker now is subject to licensing and education, but they don’t have any skin in the game.
Q: Why have you been successful when other mortgage banks are failing?
A: We’ve grown strategically. We’ve been very careful about the people we hire. We’re inundated with calls right now, but I will not do anything to hurt what we’re about. Our goal has always been to provide the best possible service to our customers. We’ve grown, but we’ve always maintained our core service standards and cost effectiveness.
Q: How do you feel about the new licensing laws?
A: I’m a big supporter of licensing. I was asked by Erin Toll to be on that (rulemaking) task force.
I also endorse the federal government doing federal licensing.
Another of the new rules is providing documents to buyers 24 hours before closing. Our standard has always been three days. Most people won’t sit in a closing surrounded by all these people and say, “OK. This wasn’t what I was told.” Most people will just sign.
Q: How have you survived the credit crunch?
A: Loan officers (at other companies) would get very far behind. Underwriters expected them to underwrite five to eight files a day, but they could only do two or three. A loan would be submitted and the house would already be under contract. Loan officers would sometimes put loans in place that didn’t meet the guidelines.
I only hire loan officers if they’re willing to be accountable at all levels. I make them stay on the line longer, until the loan is on the secondary market and the investors are satisfied.
We have everybody’s interests in mind with that loan and making sure it gets done right.
Q: Is it difficult for you to get money to lend?
A: No, in the grand scheme of things. That doesn’t mean we haven’t had rebuttals and questions.
We never did subprime mortgages. We’ve also been very conservative. We take very seriously our fiduciary responsibility to investors and government agencies. We follow the rules very closely. We don’t try to be creative.
Q: Did you ever consider doing subprime loans?
A: Oh, sure. There was a lot of money in it. But our focus is first mortgages and prime lending, so I just said no.
Q: How can you make sure you get the best loan?
A: We have a pricing engine. We enter that we have a customer who wants a conforming loan for 30 years, it’s a full-documentation loan, and we’re locking for 30 days. The system will go through and look at all the people we sell to and give us the choices.
It also alerts us to changes. Say you did a loan for 7 percent and now you qualify to refinance at 6.5 percent. Our system will e-mail us and tell us we need to contact you.
Edited for length and clarity by Margaret Jackson
