HomeBanc Mortgage Corp. of Atlanta-the No. 1 home lender in the nation's fastest-growing market-is on the offensive, expanding into other markets in the Southeast.
With $1.1 billion of retail originations in 1996 and a projected $1.4 billion for 1997, HomeBanc hopes to maintain its lead position in Atlanta.
But now it's planning to expand its Florida operation beyond Fort Lauderdale and Orlando by opening a Tampa office. "The interest in opening a new operation down there is consistent with our objective of becoming the No. 1 mortgage retail operation in Florida by 1999," said Patrick Flood, president of HomeBanc.
"This year we will finish with a total of about 14,000 loans, and last year we made just under 12,000," Mr. Flood said of HomeBanc's overall operation. "We think next year we're going to be targeting production growth of $1.75 billion." HomeBanc has enjoyed a 38% annual growth rate in retail lending since 1990, he said.
Mr. Flood grew up in South Florida and had an interest in developing the company in that region so it could benefit from an expected real estate boom. "Florida will experience long-term growth simply as a result of America retiring," said Mr. Flood.
In 1997, HomeBanc will lend a total of $400 million in Fort Lauderdale and Orlando, he said.
The expansion into Florida is part of HomeBanc's strategy of selecting cities that have better-than-average long-term growth prospects in comparison to the national average, Mr. Flood said.
"We've been No. 1 in Georgia since 1992, and we're continuing to grow our market-share lead in Georgia," said Mr. Flood. HomeBanc has slightly better than a two-to-one market share lead in Atlanta and hopes to extend this to a four-to-one lead, he added.
HomeBanc's only competition is from "the guerrilla in the bush," said Mr. Flood, referring to a host of smaller companies.
Another argument for expanding outside Atlanta is a slight flattening of the market there. Total residential permits are down about 3%, compared with a drop of 2% nationwide, said Dan Mercer, research economist at the National Association of Home Builders.
But it's not as if the Atlanta market is expected to turn cold tomorrow. "The Atlanta housing market right now is very healthy," said Mr. Mercer.
Last year, more than 45,000 permits were issued for new homes in Atlanta, said Nancy Nolan, vice president for economic development of the Metro-Atlanta Chamber of Commerce. It was the sixth consecutive year that Atlanta led the nation in residential construction, she said.
With all the construction, Ms. Nolan is not worried about mortgage companies' crowding one another. "With the kind of growth that we've had, it's still a fairly open market," she said.
