Finding a home in the market

is among a number of Roanoke Valley home lenders bucking the national trend of problem housing loans dragging down financial institutions. The Daleville-based mortgage bank, which is part of the Bank of Fincastle, opened a new office in early August amid the national mortgage-industry meltdown. “We are seeing a swing of the pendulum,” said Fay Silverman, president of the Virginia Mortgage Lenders Association.

“This swing is farther out than most.” But the crisis is not absolute — not when entities such as Colonial are signing office leases and taking delivery of new furniture. The company sees opportunities in lending to prime borrowers who can actually afford homes, and it isn’t discouraged by all the noise surrounding the subprime mortgage industry.

Industry conditions brought on by a spike in foreclosures have spawned tens of thousands of layoffs this year and placed various home lenders either in or in fear of bankruptcy, due in one way or another to high-risk borrowers’ getting homes they couldn’t afford. The expansion of Colonial Mortgage on Brambleton Avenue is bare bones. The single loan officer doesn’t even have a secretary and relies on staff support from the home office.

But it’s a far cry from what happened at American Home Mortgage Investment Corp. a month ago, when workers in offices in Roanoke and at Smith Mountain Lake learned in an 11 a.m. conference call that the doors would be closing at noon. American Home Mortgage is a Melville, N.Y., home lender that had been lending $1 billion a week. Last month, it stopped making loans, cut more than 6,000 of its 7,000 employees and filed for bankruptcy.

That contributed to an estimated 38,000 jobs lost at mortgage lending firms since Jan. 1, the outplacement firm Challenger, Gray & Christmas said Aug. Colonial emphasizes that it is hanging a shingle to advertise traditional products — those loan products that have always been here and always will be. It stresses the differences between itself and lenders that made high-risk bets that are now going sour.

“We feel most comfortable and confident working within the paradigm of traditional lending channels. And, because of this, feel we are well-positioned for growth as the marketplace of subprime and alternative lending models continues to shrink,” Colonial loan officer Eric Woodard said. Colonial is not alone in spotting opportunity in the sagging fortunes of others.

Several others are chasing opportunity in the fact that, despite a slowdown in home sales and tightening credit availability, buyers have spent about $100 million a month on homes in and around the Roanoke Valley, much of it borrowed money. First Market Mortgage LLC undertook its Roanoke expansion this year, too, placing a lending office at Franklin Road and Elm Avenue last spring. It is affiliated with First Market Bank in Richmond. Having come up to speed, it’s looking to add a loan officer.

“Real estate goes in cycles. It may be down now, but it’s going to come back,” said Dena Amos, area sales manager for First Market Mortgage. “When it comes back, we want to be ready to jump on it.” Another mortgage company, First Horizon Home Loans Corp., affiliated with First Tennessee National Bank in Memphis, Tenn., established a Roanoke Valley presence in the form of loan officer Joyce Frady in November.

Meanwhile, Gateway Mortgage Group LLC has absorbed the personnel shed by bankrupt American Home Mortgage, said Deanna Early, a former American Home employee and now a Gateway franchisee in Hardy. “People are buying houses, and people are going to continue to buy houses,” Early said. is among a number of Roanoke Valley home lenders bucking the national trend of problem housing loans dragging down financial institutions.