Bucking the trend

By Linda Lipp

Hallmark Home Mortgage quietly celebrated its first anniversary, and its first profit, this summer.

Founded by former Waterfield Mortgage executive Deborah Sturges and a silent partner who prefers to remain nameless, the Fort Wayne-based startup has grown from a staff of four people, including Sturges, when it opened, to a staff of about 50 people today.

From its first office in a former church that had been renovated by a previous occupant for retail use, Hallmark has gone on to open branch offices in South Bend, LaPorte, Mount Pleasant, Mich., Evansville and, most recently, Indianapolis. Processing for all the branches is done in Fort Wayne, and the main offices are being expanded and renovated to handle closings as well.

To say the business has bucked the national trend would be an understatement. Enormous mortgage lenders, including American Home Mortgage, which purchased the Waterfield mortgage business in 2006 and shut down the local operation, have failed in a massive meltdown that began last August. The home market is depressed, with home values in some parts of the country plummeting and sales at their lowest levels in decades.

That’s not to say that Hallmark’s success has come easily. Two years ago, when news broke of Sturges’ plan to start a mortgage business with Randy and Dick Waterfield, the sons of former Waterfield vice chairman Richard Waterfield, the executives at American Home Mortgage were not pleased.

Pressured by the buyer of the business that bore their family’s name, the Waterfield brothers eventually had to drop out of the venture.

Sturges could have become a mortgage broker with less capital and fewer hassles, but she wanted to be a mortgage lender, and so she pressed on with her original plans.

“I was very fortunate because I was able to find another investor,” she said recently. “He told me, ‘I invest in people, not businesses.’”

Even with his confidence in her, the investor wagered it would take two years for the business to see a return on investment. She bet him she could do it in a single year.

She won.

The delays Sturges encountered getting the business up and running while she found a new partner ended up paying off. In the year between the initial announcement and the closing of the company’s first loan, she had plenty of time to plan and organize and make sure everything was in place. She personally funded the salaries of three other workers during that time to help make sure everything would be ready.

“I really felt like once the doors were open, we would be in the position to provide excellent service,” she said.

One of the things that has made her happiest is that Sturges, who serves as Hallmark’s president and chief executive officer, has been able to offer jobs to a lot of other former Waterfield workers. Of the 50 people who work for the company, all but four or five had worked at Waterfield, she estimated.

Sturges learned the business herself from the ground up. She began working for Waterfield in 1970, just out of high school, and eventually rose to the position of executive vice president.

Many of the people Sturges has hired seem to share the commitment and the culture that was developed at Waterfield over the course of the 75-plus years it was in operation, said former vice chairman Richard Waterfield.

Waterfield Mortgage succeeded by going against the grain, occupying a sort of middle ground between the big banks and mortgage lenders on one end and the mortgage brokers on the other. And it did it quietly, without bragging or calling a lot of attention to its accomplishments.

“We always believed in being more successful than people thought,” Waterfield said.

Waterfield’s workers took pride in the company’s success, and although it is a bit cliché, really were like a family in many ways, Waterfield said.

“We believed in working hard and playing hard,” he said.

Hallmark’s offices reflect that sentiment. The building at 7421 Coldwater Road, renovated for a brief occupancy by Root Outfitters, has a stone fireplace in the lobby and barrel ceilings that curve over many of the individual office cubicles. It has a courtyard, called Hallmark Park, with stone benches, plants, flowers and a fountain, where employees can go for a breath of air or a few minutes of quiet. It’s also been used for office parties, with Sturges manning the barbecue and grilling burgers for her employees.

The hallways are decorated with black-and-white photos of interesting architectural features. One entire wall is devoted to historical pictures of Fort Wayne. Although she now has a conventional office, in the beginning, Sturges sat at a desk in the back hallway by the emergency exit so her lending staff could have the nicer office spaces.

The mortgage business is a relationship business, and Sturges said much of Hallmark’s expansion has come about because she had the opportunity to hire experienced lenders in other communities — the first group, in South Bend, when American Home Mortgage filed bankruptcy.

“The fact is, I’ve hired good strong people … the average person has 15 years in the business,” Sturges said. “I think, because of that, we had business right away.”

Hallmark’s rates are competitive, and it places a strong emphasis on service. At the end of the day, clients don’t care how big the company is, just how well it serves their needs, Sturges noted.

“It’s not rocket science. It’s really pretty simple,” she said.

It’s often said that all real estate is local, and Sturges sees many positives in the areas she serves, particularly for home buyers. And even with the mortgage business down overall, Hallmark has increased its market share.

Sturges has obtained mortgage lending licenses in Ohio, and is working on getting licenses in Kentucky and Illinois so the company will be ready for expansion when the economy improves.

“If we can make it in this market, I really feel positive about our position,” Sturges said. “I think we have room to grow.”

 

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