He has an easygoing style, but George Nicholas has formed one of the fastest-growing companies in home equity lending.
Since its startup just over a year and a half ago, Industry Mortgage Corp., Tampa, has become the wholesaler of choice for many originators of second mortgages and mortgages to borrowers with damaged credit. Mr. Nicholas, the company's president and chief executive, is trying to mold Industry Mortgage into a Fannie Mae for this wholly different breed of lender. And he's doing it rapidly.
Industry Mortgage's loan production more than doubled last month, to $49.3 million, from the level of June 1994. It now buys loans from 800 originators. It services $200 million of loans in Tampa. And last month, it did its largest loan securitization ever, for $110 million.
"Are they going to rise up and be really, really big?" asked C. Stuart LaDow, an Allison Park, Pa., consultant on home equity lending. "That jury is still out, but they have a lot of the ingredients."
Industry Mortgage was formed last July by a partnership of several lenders to impaired-credit borrowers, including Champion Mortgage Co., Parsippany, N.J., and Cityscape Corp., Elmsford, N.Y. The Money Store, Sacramento, Calif., became a partner late last year.
The idea was to form a wholesale buyer of "B"-to-"D"-quality mortgages free of competition similar to that of the government agencies that serve the first mortgage industry.
Industry Mortgage has built a following by being ready to buy at all times. "Anybody can be your friend when things are going well," Mr. Nicholas said. "I have worked with people who have problems. People seek out Industry Mortgage for that reason."
That made him a very popular man at last month's National Second Mortgage Association conference in Tucson, Ariz. Lenders were sure to say "hello" to the man who bails them out of tough situations by buying their loans.
"I think people like to be comfortable with whom they sell to," said Mr. Nicholas, a quietly amiable Greek immigrant with a roly-poly appearance. "They want to be able to sleep at night and not worry about their back while knowing they are getting fair value for their product."
Development of the market for securitization of credit-impaired loans is the major factor in Industry Mortgage's success. Wall Street's hearty appetite for securities backed by home equity loans now gives Industry and other conduits a secure home for their mortgages.
Industry Mortgage's partners must sell $1 million of loans per month to the wholesaler as a base of business for the new company. After that, it's business as usual. Industry Mortgage competes for customers as any home equity conduit does.
"They are keeping their other relationships," said Mr. Nicholas of his partners. "They run their businesses independently from us. They have absolutely no input on the day-to-day business that goes on here."
And they say they need no input. Some partners said they have little concern about the venture because they have such faith in Mr. Nicholas.
"This phenomenon of Industry is due to the personality, the integrity, and the talent of George Nicholas," said Robert M. Rubin, president of Investaid Corp., Birmingham, Mich., and an Industry Mortgage partner. "I talk in such platitudes, but it's all true. George is the glue behind this."
Mr. Rubin said that only someone with Mr. Nicholas' integrity and talent could bring together competitors into a partnership - and still compete with them. He called Mr. Nicholas a "gentle, brilliant soul."
Mr. Nicholas plans to continue competing with Mr. Rubin and the other partners. Most loans Industry Mortgage now buys are fixed-rates. But it is gearing up to buy more adjustable-rate mortgages.
Industry is also now originating loans. The company is doing a direct- mail marketing test to potential borrowers in Illinois and Pennsylvania.
"Will we ever be as big as Fannie Mae? I am sure we won't be," Mr. Nicholas said. "Will we be considered the Fannie Mae of this market? That is already happening."