Eustis Mortgage, a 60-year-old New Orleans company with operations around south Louisiana, is rapidly expanding its business by setting its name aside.
Since January 2015, the company has launched four new brands: Finance Home America, Verity Mortgage, Prosperity Mortgage Advisors and Legacy Mortgage Services. The brands operate under the renamed Eustis Family of Companies, with Eustis providing operational support, including compliance, human resources, accounting and marketing for companies setting up in other markets.
“It’s easier to expand a business when you’re not using your name, you’re letting people grow their own brand inside of yours,” said Alan Novotny, chief executive officer.
Eustis needed to start growing more rapidly because of changes that happened to the housing industry in the wake of the Great Recession. Regulatory changes such as those in the Dodd-Frank Wall Street Reform and Consumer Protection Act made it more expensive to produce a loan. “Before it cost $2,000 to produce a loan, now it costs $4,000,” Novotny said.
At the same time, tighter lending standards reduced the number of potential home owners, meaning there were fewer people trying to buy houses. “These are the best loans we ever made, but we’re just not making enough of them,” he said.
Eustis decided to reach out to good people in good markets and give them a chance to open a mortgage company. Finance Home America, which is based in the Houston suburb of Stafford, Texas, was the first umbrella business to come along.
Kate deKay, senior vice president, said all of the people doing business under the Eustis umbrella were referred from someone else in the mortgage industry. “If someone wants to form a company, we look for who aligns best with our goals,” she said.
The company is licensed to process home loans in Louisiana, Texas, Mississippi, Alabama, Tennessee, Kentucky and Indiana. Eustis generally likes to be in second-tier cities like Stafford or White House, Tennessee — bedroom communities that are within 25 miles of a major metropolitan area. Those are areas that have good growth and residents with good-paying jobs, and there isn’t much competition from mortgage lenders based in the larger cities, Novotny said.
While Eustis is headquartered in New Orleans, the company has offices in Baton Rouge, Denham Springs, Prairieville and Slidell.
The new arrangement is working out for Eustis. The company has seen its income double since January 2015 and the number of employees has gone from just over 75 to a little over 130.
Eustis has a volume goal of reaching $100 million a month in retail lending by the end of 2018.
“We’re hitting our growth stage,” deKay said.