Franklin American Mortgage Company
2005 Interview with:
Dan Crockett, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
Correspondent Lending to small regional or local banks in more than 38 states, Wholesale division that funds and underwrites loans for mortgage brokers and Retail division offering mortgages to builders and real estate agents in Tennessee, South Carolina and Florida.


Cover Story

CEOCFO Current Issue

Cover Story Archives

Private Equity Review

CEOCFO Interview Index

Future Features

Analyst Interviews

Corporate Financials

Contact & Ordering

This is a printer friendly page!

Franklin American Mortgage Company Looks To Continue Market Share Growth in 2005

wpe33.gif (8936 bytes)

(Privately Held)

Franklin American Mortgage Company

501 Corporate Center Drive-Suite 400
Franklin, TN 37067
Phone: 615-778-1001

wpe61.jpg (7567 bytes)

Dan Crockett
President and CEO

Interview conducted by:
Walter Banks, Publisher
March 10, 2005

Daniel G. Crockett has been President and Chief Executive Officer of Franklin American Mortgage Company since he purchased the company in September 1994. Crockett was hired as the first loan officer at the company, formerly known as Merchants Home Mortgage. In 1993, he was promoted to Vice President of Production before acquiring the company 15 months after being hired. He facilitated growth from a small 5-employee mortgage broker operation to a 290-employee multi-faceted mortgage banker with three divisions. He created relationships with the following and expanded them to their fullest potential: Department of Housing and Urban Development; the Department of Veterans Affairs; Fannie Mae; Freddie Mac; Ginnie Mae.

Major achievements of the company under the leadership of Dan Crockett include reversing negative financial trends and turning the company into a profitable Inc. 500 Hall of Fame institution. He originated Conventional, Jumbo, FHA, and VA residential mortgage loans and initiated establishment of wholesale and correspondent funding divisions.

Before joining Franklin American Mortgage Company, Dan Crockett resided in Tokyo, Japan, teaching English conversation and studying the Japanese language and business culture, from May 1991 to July 1991. In 1992, he was a financial planner with J. H. SHOEMAKER & CO., INC., and participated in their Mentor program working directly with their corporate Vice President.

Dan Crockett received his Bachelor’s Degree in Business Administration, from LAMBUTH UNIVERSITY, Jackson, Tenn. He is also a graduate of the Mortgage Banking Association School of Mortgage Banking. His achievements include being All American in both College Football and Baseball, becoming a Licensed Real Estate Agent in 1995, completing the Series 6 and 63 Securities Exams, and registration with the SEC and NASD. Affiliations achieved from 1995 to 2004 are Mortgage Bankers Association of America, National Association of Mortgage Brokers, Tennessee Mortgage Bankers Association and Tennessee Association of Mortgage Brokers.

Company Profile:
Franklin American Mortgage Company (FAMC), a privately-held mortgage banking firm located in Franklin, Tennessee, is a full-service professional mortgage banker licensed to provide residential mortgages throughout the country. FAMC, which provides a host of diverse, flexible mortgage packages for customers with a variety of backgrounds and needs, is committed to helping families and individuals achieve the dream of home ownership though its three divisions: retail, wholesale and correspondent.

An emerging leader in the mortgage industry, Franklin American Mortgage Company is fast becoming a preferred lender for consumers and mortgage professionals across the country. The Company’s Correspondent Lending division was designed to service small to mid-sized lenders across the nation.  This division was created to harness FAMC’s growing national presence to provide high-quality services and products to these institutions and their customers. This will help smaller lenders compete with larger “mega banks” in an increasingly tight market.

The Company’s Wholesale division funds and underwrites loans for mortgage brokers, offering efficiency and scalability through superior technology. FAMC’s Retail division offers individuals throughout the country an opportunity to work directly with Franklin American Mortgage to secure a home mortgage.

FAMC offers borrowers, brokers and lenders the strength and security of a forward-thinking national mortgage company, dedicated to remaining an industry trendsetter. FAMC truly values its relationship with each customer and mortgage professional they work with, maintaining a company tradition of responsiveness and personalized service characteristic of a much smaller organization. This philosophy has enabled FAMC to become one of the fastest growing mortgage bankers in the nation.

Headquartered in Franklin, Tennessee, the company is FHA Direct Endorsed, VA Automatic, a LAPP authority and a Fannie Mae, Freddie Mac and Ginnie Mae Approved seller/servicer.

CEOCFOinterviews: Mr. Crockett, with the challenges that you faced in 2004, such as lower interest rates, as well as volumes, how did you fare over 2004?
Mr. Crockett: “The year of 2004 was a very challenging year. The end of the refinance boom began to show itself in the end of the fourth quarter of 2003, which was a record year for our industry. Moving into 2004, there was a lot of excess supply in our industry. Supply was handsome in the marketplace and demand was waning. We knew that margin compression would be prevalent and that trying to make a dollar was going to be more difficult. We knew the success of 2003 could not last forever and we figured the companies that put away for a rainy day would have balance sheets strong enough to withstand 2004 and years to come. Moving into 2004, we were well informed and we were not expecting anything different than what we actually got.

Our philosophy in growing the company is to increase market share. We wanted to out-pace the drop-off in the industry. The industry is down about 35% and I think we were off about 20% year-over-year of 2003-2004. So, we feel like we gained market share in 2004, which was our goal. Even though our margins were way off and our bottom line was not as handsome in 2004 as it was in 2003, we had a good year and reached our goal if not exceeded our goal for 2004 corporately. We enhanced our product mix a bit, which has to be done when you get into a tighter market. The product that people demand begins to change. Even though interest rates are still at record lows and people are still buying homes at record paces, there are only so many people in the world that can refinance a mortgage. We did heavy refinancing for two or three years and even though there is still a lot of refinance business out there, it is just not running our industry like it was.”

CEOCFOinterviews: Is most of what you do now new loans?
Mr. Crockett: “I think about 65% of our business is purchase, which is why we want a purchase side for a complete purchase market. You are always going to have twelve to fifteen percent refinance business in the marketplace for reasons other than a rate and term reduction, debt consolidation, cash-out, tapping into equity; those types of things.”

CEOCFOinterviews: Is your Correspondent division growing?
Mr. Crockett: “Yes Correspondent is growing and doing incredibly well. They did a good job in 2004 of continuing to add to their market presence in only their third full year of operating. We are excited about where we are going. In the last few weeks we have hired some really good people across the country. We are continuing to expand our marketplace while creating new opportunities. Our correspondent division is fairly new market-wise and business-wise, so its upside is still ahead. We are very excited about that business and it has done very well. We love our strategy and I look forward to its continued growth.”

CEOCFOinterviews: Have you had the success you have been looking for in reaching small and local banks?
Mr. Crockett: “Yes, we have. Our forte is bringing some added value to small and local banks. We enjoy being of service to them. Because they do not do billions of dollars of volume like some other mortgage bankers and larger banks tend to do, they may not want to be involved in some of the operational things. We have some segmented units of our division here on the Correspondent side that provide added value and service for them. Providing this service has given us an advantage in the marketplace. We also provide some government lending and training, and government underwriting. We also provide some underwriting on the conforming side, which is unique to that business. We try to bring added value to our clients and that makes us more attractive than our competitor.”

CEOCFOinterviews: Is it the responsibility of your reps to reach the small and local banks?
Mr. Crockett: “That is correct. Our correspondent reps will go out in the marketplace and handle anywhere from a two to six-state territory or region. They are currently calling on prospective smaller mortgage bankers, although we are developing a program, which will allow us to capture some of the larger banks and larger mortgage banking operations business in the future. I think our overall client base is going to continue to remain constant as it has in the past and I think we are going to see some new opportunity in the future.”

CEOCFOinterviews: On the wholesale side, how has the search for new reps to cover new territories such as the far west and California been going?
Mr. Crockett: “It’s gone very well. We now have two or three reps in California. We have a rep in Utah and one in Tucson and Phoenix, Arizona. We have had some great success out there. With the business being as tough as it was in 2004, and everyone operating under the survival of the fittest mentality, we saw a lot of consolidation in the industry and we have seen a fair amount of people who decided to exit the business. We found it to be a real opportunity for us. The market of 2004 was tough on the bottom line and on revenue and equity return, but it did give some solid companies with good balance sheets the opportunity to recruit. Recruiting in 2004 was positive and we look for 2005 to be just as strong. We are going to do a good job of adding to our staff and finding some quality talent. Acquiring solid people will give us more opportunity to grow our market share.”

CEOCFOinterviews: I see you have hired some new regional vice presidents to take charge of your wholesale reps.
Mr. Crockett: “Yes we have. We have had Doug Schorgel and Brett Arsta, already covering a lot of the country on the wholesale side. We have Brandon Bauch, who is based in Phoenix, Arizona, who is covering a lot of the west for us. We kind of segmented the country and have a very good level of leadership at the VP level. We also decided this year, to create new leadership positions on the production side, which we call area managers or regional managers. An area manager could cover a state the size of Florida, to a three, four or five-state territory that has the equivalent volume potential as Florida. We created a model that shows the billions of dollars of purchase business we want in each area. Our goal is 2% market share in each area. If we achieve that it will put us in the top twelve in total lending in the country, which is ultimately our goal.”

CEOCFOinterviews: How many reps do you have now?
Mr. Crockett: “On the wholesale side, we have about 45 across the country. We have little to no presence at all in the northeast. We are however starting to think about pursuing some acquisition work. If we can find a cultural fit and a product fit, as well as a company that is a good value; we might consider doing some acquisitions to help our market opportunity.”

CEOCFOinterviews: Last time we talked you were looking at expanding but not through acquisitions; it looks like some things have changed.
Mr. Crockett: “Yes, I think regionally speaking, if we can find a quality cultural fit in the northeast, we would look at acquiring it. We are also not opposed to acquiring a company somewhere else in the country as long as we can provide them some added value and they can give us some added market presence. That situation sounds very attractive.”

CEOCFOinterviews: Is owning a bank still something that you are considering or is it on the back burner?
Mr. Crockett: “That is on the back burner. It is something that I am always thinking about but I think we have more work to do yet on the mortgage banking side. We have more challenges and opportunities ahead of us. We are better positioned right now, opportunity wise, than we have ever been in twelve years of being in business. I really think we have a chance to do some unique things. I want to make sure that we continue to follow our mission and vision and stay on-course. We want to be perfect, and when we achieve everything on our list for the mortgage banking side, then we might look at diversifying ourselves by moving into the banking or insurance side.”

CEOCFOinterviews: You have mortgage brokers, banks and builders out there, what do you do that gives you the edge with these entities?
Mr. Crockett: “I think generally speaking, macro-wise, our service is very good. We get a loan, underwrite it and get it closed typically better and more efficiently than our competitors. Underneath that, you have to have a competitive price because people can’t do business for free and they have to be able to make a living at it. We have to make sure we give our customers a competitive price for their product, which we do. We try to be consistent, and not in-and-out of the market based on what our volume needs are. We try to always maintain a competitive price and stay in the market because we are a growing company; we want all the business we can get.

We had an independent study done by a group out of New York that does operational efficiency evaluations on mortgage banking operations and we are three times more productive than the average mortgage banker, operationally speaking. This allows us to do a lot more business with a lot less people, which equates to either higher margins or much more competitive pricing on the street than our competitors can offer. That keeps us competitive and that technology also makes our service better because we can choose to keep the same number of people and do a whole lot more business because the technology added benefit is there.

We can also provide a lot more quality and speed to our product and to our service, because we are able to get through it so much faster because of the technology pieces that we have. Our technology is not so much about direct-to-consumer as it is about integration; it is about connectivity with our vendor base, about producing information and producing value to each transaction without having much human interaction. That has enabled us to be more efficient in productivity on the operation side, and it cuts down on errors. The quality of our business has improved greatly through many different pieces of technology.”

CEOCFOinterviews: Have you seen much expansion over your retail division over the last year?
Mr. Crockett: “Yes, I think we are looking to do some things and we are in the process now of trying to develop a presence in the Dallas area because we have a big operating center there. All operations for the correspondent division and our big operating center for wholesale are both headquartered in Dallas. We decided we needed to get a retail presence there. Whether it is by acquisition or organically, we have made a commitment this year to try to start building a retail presence in that market.”

CEOCFOinterviews: I see you have been presented with awards over the last few years. You are obviously well-liked in the industry and people appreciate what you are doing.
Mr. Crockett: “Well I appreciate that. We have always tried to do it right. We live by our mission, vision, and value system. We think they are all very important. Our mission is much more than a statement; it is everything about who we are. We want to bring a professional image, honor, integrity, and character to the entire mortgage banking industry. Hopefully, we are doing our share in keeping it the great business that it is.”

CEOCFOinterviews: Will you address potential reps out there that may be looking for a position and as you expand, in which areas might you be looking for reps?
Mr. Crockett: “We are looking for reps all over the country. If you are really good, and you are looking for a place where you can have a voice, Franklin American may be a perfect fit. Everyone at our company has a voice, you are going to be heard and you are going to make an impact. The other thing is that we have great pricing and great service. Above all that, we have a strong management team, a great commitment to being the best. Our track record speaks for itself. I think the culture is unique; it is a team-oriented, family environment. Everybody is pulling in the same direction and there is a lot of upside opportunity. When you are involved with a company like us that is growing like we have and is approaching the top-fifty in total lending in the country; there is upside potential there.

We will need more leadership as time goes on. We have the areas positioned now in wholesale; we are looking for managers or regionals on that side, and that is an advanced opportunity for many people. Usually if people come and talk to us, they typically join our company. Our conversion rate interview-to-hire is extremely high based on people that we choose. We are excited for 2005 and we are looking forward to the next twenty years. I think we have many good things coming and much work to do. We are excited about where we are headed.”

CEOCFOinterviews: In closing, where do you see your growth coming from in 2005?
Mr. Crockett: “I think it is going to be market share. Comparing fourth quarter 2003-2004, we grew our market share about 40 plus percent. We are well-positioned and look forward to what’s to come in 2005.”


Any reproduction or further distribution of this article without the express written consent of is prohibited.

“The market of 2004 was tough on the bottom line and on revenue and equity return, but it did give some solid companies with good balance sheets the opportunity to recruit. Recruiting in 2004 was positive and we look for 2005 to be just as strong. We are going to do a good job of adding to our staff and finding some quality talent. Acquiring solid people will give us more opportunity to grow our market share.” - Dan Crockett


To view Releases highlight & left click on the company name! does not purchase or make
recommendation on stocks based on the interviews published.