Lending a Hand Burbank mortgage firm, propelled by a young ownership and staff, grows quickly to find its place in competitive industry By SLAV KANDYBA Staff Reporter Six telemarketers chatting with clients out of a residential home and a dining room functioning as an office has faded into memory, but at one point that’s just about all First Security Lending of Burbank had. When Justin Aldi and Ronnie da Motta, a pair of friends since ninth grade at Burbank’s John Burroughs High School, decided to start the mortgage lending company in 1998, each had chipped in $1,000 of “essentially (our) life savings,” Aldi said. There weren’t many other company assets at the time other than its owners’desire to succeed. At the beginning, the pair got backing from independent mortgage broker Steven Fisher in Sherman Oaks, and set up their branch office in Aldi’s Burbank house. “Every month we put all the (commission in the bank) we never took (much of) the money from the loans we closed,” da Motta said. “We pulled just enough to pay the bills so we could expand and grow.” Over the next six years, it paid off. At 29 and 30, Aldi and da Motta, respectively, have a mortgage business that handled close to a half-billion dollars in loans last year. What’s remarkable is that they have done it almost purely without any formal advertisement other than handwritten flyers they distribute door-to-door throughout Burbank. That growth has led to better office space, too. First Security now occupies a spacious office building in the shadows of the offices of entertainment companies in Burbank. Aldi and da Motta say it’s their energy that makes the difference. The fact that they are in the same age group as their loan officers doesn’t hurt either. “We can relate to most of our loan officers,” da Motta said. “Everyone is equal here you can’t tell who the loan officer is and who is an assistant.” Because the atmosphere at work is so “casual but professional,” as evidenced by T-shirt-and-jeans style of most employees, the place has a comfortable, laid back feel. Getting into the business So how did the pair get into mortgage lending at such a young age? Da Motta, for one, says he “stumbled” into it, having accepted an entry-level job at WMC Mortgage Co. in Woodland Hills. Aldi, meanwhile, worked for a mortgage lender part-time while attending California State University Northridge. When he graduated, he worked for Heartland Mortgage for a while. He kept in touch with da Motta, and the two often referred business back and forth. It dawned on them that starting a business would be a good idea. So they did and that’s when the six telemarketers in Aldi’s house come in. That didn’t last very long, however. “After six months, we realized it was ridiculous,” Aldi said of the situation. At that point, the pair rented a 1,000-square-foot office on Magnolia Boulevard, hired several agents and “started growing,” Aldi said. The growth at first was slow, because “we didn’t want to expand beyond our means,” he said. But, “once we got clout we wanted to expand.” In 1998, the company financed $10 million worth of loans. That figure tripled to $30 million by 2000, and in 2003, grew to $450 million. In terms of gross sales, the company made $150,000 in 1998, compared with $10 million in 2003. Ninety percent of loans come from direct referrals, with about 40 percent in new purchases, 5 percent in commercial lines, and the rest from refinancing. Much of the financial growth is attributed to First Security having become a direct lender, da Motta said. “We fund the loans with our money and then sell to our own investors,” he said. “You inherit liability when you do that (but) when you take that internally, you don’t rely on other parties. We approve the loans.” As result of the growth, First Security is taking steps to expand. The company will soon open a branch in Monrovia, which will bring its total number of offices to four (the others are in Encino and Irvine). It has 90 employees, including 70 loan officers and assistants, and Aldi and da Motta want to add more. “We see ourselves adding additional staff as the market cools off,” da Motta said. The staff that First Security has now is essentially the same as when the company was first founded. There is almost no turnover and many new employees are in fact recommended by someone they know who already works at the company. “We don’t give people a reason to leave,” Aldi said. “Our guys from Day 1 are pretty much still here.” Both Aldi and da Motta live in Burbank and intend to stay there, while serving clients in most Western states, where they are licensed. First Security has cut itself a niche by making loans to people who would not typically be able to get mortgage loans from major banks. Although risky, the move has paid off handsomely for Aldi and da Motta. “Most of our success has been taking leftover business,” Aldi said. “We take a lot of non-qualifying business.” Vicki Robledo, a Burbank homeowner, bought her first house with a mortgage from First Security, refinanced it subsequently and is now in the process of refinancing for the third time to do an add-on to her house. “I hate to say it it’s almost too easy,” she said of working with Aldi, who she deals with directly. She was introduced to Aldi and da Motta at the very beginning of the pair’s business relationship when they were called J & R; Lending by her Realtor. “I call them whenever I have questions, whenever we do anything,” Robledo said. “I have the number memorized and their extension.” Robledo doesn’t use Aldi’s youth against him, either she praises it. “Justin is one of those people that age doesn’t matter,” she said. “He lives and breathes this stuff. Age hasn’t been a problem for us. I’m constantly recommending (First Security).” Sheryl Carey, a broker with Los Angeles-based Sepulveda Group Enterprises, has also known da Motta and Aldi since they worked out of Aldi’s home. “They were focused and really wanted to make a difference in the loan business. They will go the extra mile.” Creativity is a quality Carey also likes about them. “I think they’re extremely creative, I’ve never lost a transaction,” she said. “They’ll find some kind of program to put a buyer in.” Last but not least, Carey’s observations of what’s at the core of First Security are similar to those of the company owners themselves. “They have fun while they take care of business,” Carey said. For Aldi and da Motta, it’s exactly that: “It feels like you’re working and hanging out,” Aldi said. SPOTLIGHT: First Security Lending Year Founded: 1998 Employees in 1998: 2 Employees in 2004: 90 Loans Originated in 1998: $10 million Loans Originated in 2003: $450 million Goal: To expand the business by adding new agents and branching out into other areas of the real estate business. Driving Force: Youthful energy, casual and comfortable working environment, loyalty.