Blooming in the desert

LeAnn Thacker, left, points at her husband, Bill, at their business, Columbia First Mortgage. (Zachary Kaufman/The Columbian)

Bill and LeAnn Thacker, owners of Columbia First Mortgage, say an old-fashioned approach has allowed the business to grow while many competitors are struggling. (Zachary Kaufman/The Columbian)

The Clark County residential real estate industry has been grappling with declining sales for more than a year, pulling down many lenders along the way.

In Vancouver, Millennium Funding Group and Home 123 Mortgage shut down. Washington Mutual was undone by its risky lending and acquired by JP Morgan Chase. Across the county, however, a number of small mortgage brokerages — businesses that bypassed the quick wealth of easy loans — say that times are good.

While easy money inflated their competitors’ profits, these businesses generally shied away from subprime loans and state-income mortgages. And when that easy money dried up and the competition wilted, these more conservative businesses are surviving — and in some cases blooming.

“The people that were in it for the money are now gone,” said LeAnn Thacker, broker and co-owner of Columbia First Mortgage in Vancouver.

Thacker and her husband, Bill, founded Columbia First in 2001, when she grew frustrated with the culture of her employer.

“Mortgage brokers often will qualify people based only on the numbers,” said Bill Thacker. “We go deep with our clients and try to recommend a loan that works with their needs.”

By avoiding subprime loans and steering borrowers away from loans that might not be a good fit, Columbia First likely lost potential customers who wanted fast and easy loans, LeAnn Thacker said. But it also built relationships, so that today nearly all of its business comes through referrals.

Columbia First Mortgage has been growing revenue 3 percent to 5 percent each year since 2005, and foresees stronger growth this year.

Relationships and referrals are at the heart of Vancouver-based Cascade Mortgage and Financial Co. of Washington Inc., founded in 1984, said Jerre Broselle, 62, broker and owner.

“In the boom era, you had people selling mortgages who didn’t have any idea what they were selling,” Broselle said. “They came off the street and became a mortgage loan officer in a matter of minutes. They probably made a lot of money for a short period of time, but that won’t carry you for the long run.”

Cascade, founded in 1984, chose to avoid subprime loans and generally shied away from even the more common adjustable rate mortgages.

“We lost out on transactions because of it,” Broselle said.

Cascade has been hard hit by the real estate downturn, with double-digit revenue drops from 2007 to 2008. But after 25 years in business, Broselle has learned to save during boom times to prepare for difficult years.

Despite the pain that his business is experiencing, Broselle applauds stricter regulation of his industry.

“Underwriting got laxer and laxer, until the early 2000s and the past few years, when there was almost no documentation required,” he said, referring to paperwork proving income, savings and other details of a borrower’s financial health. That created opportunities for unscrupulous borrowers and lenders to take out loans they could not afford to pay off, until mounting foreclosures forced a change.

“Documentation requirements have become stricter, but not extreme,” Broselle said. “This is where we should have been in the first place. This is a much more drastic recession than it would have been had we held some standards six or eight years ago.”

Tightening standards elsewhere have been a boon for Creekside Mortgage Inc., which just wrapped up one of its strongest years in business.

Creekside specializes in Veterans Administration loans, one of the few available remaining sources of 100 percent home financing.

VA loans are among the least likely to lead to a foreclosure, according to a recent article in the Army Times, which Creekside owner Kerry Greenwald attributes to “the honor and duty factor.”

“The main thing we’ve been doing has been getting people out of (high-interest) loans and putting them into the VA,” Greenwald, 35, said.

With interest rates at record lows, demand is mounting for refinances. Creekside has received close to 100 loan applications in the past 2 weeks — “more than we took in over the previous six months,” Greenwald said. “We’re hiring three new people to do the paperwork stuff.”

Creekside’s success today is tied directly to sticking to principles during boom times, he said. “That was very hard to do in those last years. We saw people doing two to three times as much business as we were doing. Now they’re gone.”

Courtney Sherwood covers banks and money. 360-735-4553, courtney.sherwood@columbian.com.