It took a decade longer for Keith Luedeman to sell his online lending business Goodmortgage.com than he expected when he started in 1999. But after its May sale to First Guaranty Mortgage, the 75-employee company is part of an organization that Luedeman thinks is poised to become among the nation’s five largest nonbank mortgage lenders.
That’s because a private-equity unit of Pimco, the world’s largest holder of mortgage-backed securities, bought a big stake in Frederick, Md.-based First Guaranty last year. Pimco also owns about 11% of PHH, one of the 10 largest U.S. mortgage lenders. With its new backing, Goodmortgage.com will expand from 18 states and the District of Columbia to a 40-state footprint and may add as many as 200 new employees at its Charlotte office over the next 18 months.
Pimco, which manages $1.5 trillion, is expanding in mortgages as many banks pull back because of rules forcing them to hold more capital and avoid investments that can be more difficult to sell. “A lot of the big banks are focused on [making home loans to] high net worth borrowers, which opens great opportunities for us,” says Luedeman, 51, who owned 100% of his company. “We also think millennials are going to buy a ton of homes over the next decade,” with many preferring to borrow through online lenders rather visit traditional bank branches.
Luedeman talked with another giant private-equity company before agreeing to sell to First Guaranty, which serviced more than $7 billion last year. Terms were not disclosed. He will be a managing director with a commitment to stay at least three years.
A sale might have come sooner, except for that nasty period in 2007-09 when mortgages became a dirty word, Luedeman says. Fortunately, Goodmortgage.com stayed clear of subprime loans, which sunk many lenders. “We just ran a solid business, and we grew through the recession.”
CHARLOTTE — The Department of Justice and the state of North Carolina filed an antitrust lawsuit against Carolinas HealthCare System, alleging CHS used its market power to influence insurers and prevent competition. CHS is the largest health care system in North Carolina with 39 hospitals and net operating revenue
of about $8.7 billion in 2014.
CHARLOTTE — Cliff Cameron, who led Charlotte-based First Union bank from 1966 to 1984, died May 28. He was 96. Cameron was known as the founder of “The Group,” a gathering of business leaders that included former Bank of America CEO Hugh McColl Jr., former Duke Energy CEO Bill Lee and Ed Crutchfield Jr., his successor at First Union. Cameron served as state budget director under Gov. Jim Martin, insisting on a salary of only $1 a year.
KINGS MOUNTAIN — Porter’s Group will add 44 jobs and invest $3.75 million to build a plant in Cleveland County. The Bessemer City-based company makes fabricated metal parts for the automotive, energy and construction industries and employs 152 in the state.
Legendary grocer Ralph Ketner, who built the largest North Carolina-based supermarket chain and made his initial Rowan County investors rich, died May 29 at age 95. Ketner started Food Lion in 1957 when he was 37. By his retirement as board chairman in 1991, Food Lion had 680 stores. It wasn’t easy: The company made a combined $36,000 in its first decade, until Ketner switched to a low-price strategy that sparked rapid growth. Ketner and his brother, Brown, and friend Wilson Smith raised $65,000 — $533,000 in today’s dollars — from 125 folks in the Salisbury area to start the company. Many became millionaires as Food Lion shares soared in the ‘70s and ‘80s. The gains helped make Salisbury one of North Carolina’s most prosperous small cities. Belgian grocer Delhaize bought 51% of Food Lion by 1976 but let Ketner and his successor, Tom Smith, run the business for most of the next three decades. In retirement, Ketner often criticized the company. Delhaize shares now trade about 75% lower than their peak price in 2007. Freed from his obsessive work style, Ketner became one of Salisbury’s biggest champions, giving money to many civic groups including $3 million to Catawba College, where the business school bears his name.