Madison Home Equities Inc. has an unusual strategy of slow growth to meet the needs of its clientele.

The small mortgage lender, based in Lake Success, N.Y., is one of the nation's largest providers of loans to minorities under the Department of Housing and Urban Development's FHA program. About 70% of its clients are members of a minority group, and 20% are women.

Madison's borrower base consists largely of nurses, correction officers, and other professionals. Many are heads of double-income households, and they tend to work nontraditional hours.

Thirteen years after she founded the company, the president, Nadine Malone, still works nights and Saturdays, keeping appointments at clients' homes. And last year she did the unthinkable for most financial services companies: She put the brakes on lending.

The company was on pace to make $150 million of loans for the year, after lending $119.8 million in 1997.

"I noticed that whenever we go over $150 million, we kind of lose our service; we're not as sharp. That's something we try not to do," Ms. Malone said.

The company finished 1998 having originated 863 loans totaling $134.6 million. Madison said it plans to keep volume between $135 million and $150 million.

Still, Madison does have ambitions to expand its reach-meaning Ms. Malone's long hours are unlikely to end anytime soon.

The company says it plans to open offices in Pennsylvania, New Jersey, Connecticut, and Florida in 2000. The challenge, Ms. Malone said, will be to originate more loans in those areas and stay within easy reach of customers.

Ms. Malone, who last year finished second on a list of America's top 10 female entrepreneurs compiled by Dun & Bradstreet Corp. and Entrepreneur magazine, launched the company in 1986 with funds from Madison Resources, a home improvement company started the year before.

Madison, named after former First Lady Dolley Madison, normally has 150 to 200 loans in its pipeline.

Madison is moving into new office space on the south shore of Nassau County on New York's Long Island and is likely to be there by the end of the year, Ms. Malone said.

She said Madison had been originating loans in the four states where it plans to open offices next year, before deciding to concentrate on New York. She said New Jersey is a priority right now. Officials at Madison said they want to have five loan officers there by March.

But even with the expansion, Madison officials want to retain the lender's customer service.

The challenge for Madison is to make customers feel comfortable enough to discuss personal financial business, which sometimes includes the complexities of child support, collection judgments, and late credit card payments.

Finding the right loan officers to draw that confidence out of customers is not always easy. The officers at Madison must-and, Ms. Malone said, they normally do-successfully translate a customer's story into a loan application.

Madison says it will hire more loan officers who will be able to walk borrowers through the process from application to closing.

All the underwriting will be done at the central location in Nassau County. Madison employs three underwriters, each with at least 20 years of experience in mortgage lending.

And if an application contains questionable information, it is not automatically rejected. Instead, the applicant is called into the office to resolve questions.

While parts of the mortgage banking industry continue their charge toward complete Internet origination and application processing, Madison is taking more measured steps.

The company is working on a Web site, which it says will probably have a preapproval function. But instead of drawing consumers into a chain of electronic steps in a mortgage application, the on-line function would be used to generate leads, sending the information to an office where a loan officer can make personal contact with a client.

"I just don't think the world is as sophisticated as everybody is making it out to be, with computers and the Internet. There is still going to be that clientele that is not sophisticated enough to go onto the Internet to make out an application," Ms. Malone said.

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