Skyline Financial bags $8m investment for expanding mortgage business
The January 2010 issue of HousingWire magazine asked the question "Is Bill Dallas back?" Now, 10 months down the line the answer is a definite 'yes' as his business Skyline Financial received an $8.2 million investment from a venture capital firm. The $8.2 million is a series B investment by GRP Partners, the North American and European institutional investment firm, which means that Skyline will maintain day-to-day decision making in its direct mortgage-lending business. "GRP Partners is a seasoned venture capital firm and they see the mortgage market like we see the mortgage market," Dallas told HousingWire in a telephone interview Monday. "The wholesale mortgage-lending business is in a paradigm shift with increased regulation," he said. "Whereas we benefit from a fully-integrated front end, and we use a paperless platform that the investors can access for full transparency on the back end. It takes guts, but we are going to be one of the non-bank survivors in the mortgage-origination space." Dallas was the founder and oft-owner of mortgage lender First Franklin, which conducted business for 30 years before finally being shut down when acquired by Bank of America Merrill Lynch in 2008. The GRP funding, which also includes capital from Chaparal Investments, will be used to expand mortgage-origination capacity. Skyline also will start hiring more seasoned loan officers and buyout other mortgage-brokerage firms. Skyline originates $100 million of monthly loan volume with 120 loan officers and 11 branches across California, Texas and Oregon. Dallas says the mortgages currently being written in today's market are of the highest quality he's seen, with buybacks from the government sponsored agencies coming from failure to meet agency procedures. "Currently process overlays are herculean and the repurchases we're seeing are for those infringements, not borrower data," Dallas said. "In fact our portfolio is pristine -- average FICO 750, LTV 68%, DTIs less than 35% -- and we have direct access to the agencies so we are better than a bank at what we do." Brian McLoughlin, partner at GRP Partners and now a board member of Skyline adds that, "with reduced competition and the market’s over-reliance on large banks to provide loans, a proven independent player like Skyline has a rare opportunity to attract and acquire both individuals and whole firms of top-producing, independent originators." Write to Jacob Gaffney.