Cherry Creek Mortgage Co. is among the lenders picking up the pieces in a shattered mortgage industry. About one out of every 500 mortgages made nationally this quarter is coming through the independent lender, compared with one out of every 2,000 back in 2004.
Cherry Creek Mortgage is on track to underwrite a record $3 billion in mortgages this year, compared with the $1.7 billion it has averaged the past few years.
Through acquisitions and new hires, the independent mortgage lender has grown its staff from 400 to 500 and lends in 10 states.
“The last six months have been the most intense period of time I can remember,” said the company’s president and chief executive, Jeffrey May, who has been with the firm since the late 1980s.
A focus on long-term customer relationships, an adherence to more conservative underwriting standards and honoring commitments to its banks when loans did go bad are among the reasons Cherry Creek has survived.
“To grow a firm to such size, and so rapidly, yet untainted by the grotesque ethical behavior recently so common in the mortgage world — that’s a corporate citizenship lesson to all businesses,” Boulder mortgage lender Lou Barnes said.
In July, Barnes plans to move his practice of 19 years at Boulder West to Premier Mortgage, a company Cherry Creek acquired in 2006.
As to the state of the mortgage industry, here’s one telling statistic: The Colorado Mortgage Lenders Association now counts 176 members, half the 350 members at the market peak in 2005, president Terry Jones said.
“The companies growing are good, solid companies that have weathered the storm and are originating higher-quality loans,” he said.
Cherry Creek Mortgage stuck by plain-vanilla government-backed loans even when it lost market share. The company had discipline to forgo profits and lose market share when competitors were getting greedy, May said.
Subprime loans, made to borrowers with low credit scores, represented only about $20 million of the company’s business at their peak in 2005, May said.
Now, Cherry Creek finds itself in a sweet spot, with the right types of loans to offer, fewer delinquencies to clean up and more-stable funding sources.
“If you are in the lending business, you are going to have some loans that go bad,” said Wil Armstrong, the firm’s chairman. “We did a better job than most at underwriting our loans. We knew our customers.”
Wil’s father, former U.S. Sen. Bill Armstrong, financed May when he bought the struggling firm out in 1990. Wil joined the firm in 1992, and May has overseen the day-to-day operations.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
Cherry Creek Mortgage Co.
Employees: 500
Offices: 30 in 10 states
Projected loan volume: $3 billion
Average loan size: $225,000
Chief executive: Jeffrey May
Chairman: Wil Armstrong
Ownership: Armstrong and May families
Year started: 1987
