In September of 2003 Hill Mortgage Consulting was formed. Our focus from the beginning was to fill a void in the Tallahassee market for competitive commercial financing. From the inception, we refused to be caught up in the sub prime residential facilitation, mainly because we did not believe that those loans were a good option for borrowers, and we wanted to set ourselves apart from the pack by only underwriting high-end conforming loans, all the while mainly focusing our efforts on income-producing commercial properties. Our competitive advantage came from the fact that local banks did not offer an aggressive long-term fixed loan package for local commercial properties. In addition, commercial lenders outside of the Tallahassee market did not have a presence or a direct cost associated with a brick and mortar existence. This left a comprehensible void in the market that allowed us to take these highly sought after commercial loan packages to banks that did not have direct costs associated with the loan file, thus allowing us the ability to aggressively compete with the local banks on pricing.
In 2005, we began placing large-scale development loans with lenders and private equity investors. This part of the company was booming through the beginning of 2006.
By the summer of 2006, it started to become evident that the real estate bubble was starting to splinter. By the summer of 2006, developers began approaching us to request our services for the purpose of refinancing, renegotiating, or finding investors interested in liquidating their portfolios. At that time, these investors were prevalent and buying distressed properties at mortgage payoff, which at the time we believed was a good deal (hindsight sure is 20-20). Some of our clients took advantage of this while the majority did not, because they did not possess the ability to cut their losses, but rather they believed they could recoup some of their costs. For most, this turned out to be a costly mistake.
Through 2006 and the mid part of 2007, our primary business was providing financing for commercial income properties. This came to a sudden halt in August of 2007, when the CMBS (Commercial Mortgage Backed Securities) market froze up due to the residential sub prime mortgage market collapse. Luckily (for us), as this was happening, we had been building relationships with Small Balance Lenders and Regional Balance Sheet Lenders, which gave us an avenue to continue to fund commercial cash flow properties. Through the end of 2007 and 2008, our reputation as loss mitigation consultants for developers slowly grew, which balanced out the falloff in new commercial loans. Then in early 2009 we began to focus on the residential borrowers and the deficiencies found in their loan files. Our success with borrowers coupled with our vast knowledge of the lending process has afforded us a unique ability to reason with lenders on behalf of the borrower regarding their non-performing loans, and either short sell the loan or reposition the loan in a manner that would benefit both the borrower and lender.
Since the collapse of the credit markets, our business model has focused 90% of our attention on the demand for loss mitigation consulting… for property owners of all types. Our benefit to borrowers is two-fold as it pertains to loss mitigation: First is the valuation of the asset. We take the portfolio and price it at what the market will bear, not as it pertains to comparable sales or mortgage payoff. As it pertains to active listings, our philosophy is a basic one: It doesn't matter what a comparable property sold for in the past… what matters is what comparable properties are being marketed for in the present and how long they have been at that price with no activity. Second, we establish a non-emotional buffer between the borrower and the lender. Throughout this process we build a file for the lenders This file will mitigate the loss for both the borrower and lender through either a deed in lieu or a short sale. The file will also serve as a detailed record that demonstrates the lender's unwillingness to mitigate the loss (this file will be a benefit to the borrower's counsel in the event the lender seeks legal action).