Published October 2004

MILA ‘revolutionizing’
mortgage industry
Growing company able to offer
borrowers same-day service

Photo courtesy of MILA Inc. This 176,000-square-foot building in the Quadrant I-5 Center in Lynnwood, once occupied by Boeing, has been bought by CRS Financial, MILA CEO Layne Sapp’s real estate investment holding company. After a $5 million remodeling project, MILA will move 800 new employees into 110,000 square feet, leasing the remaining space to other tenants.

By John Wolcott
SCBJ Editor

“MILA buys Mountlake Terrace office building” ... “MILA buys downtown Lynnwood office buildings” ... “MILA to add 800 jobs” ... “MILA looking at $1 billion mortgage year.”

What is MILA and why are people talking about it?

After years of quietly establishing a commanding presence in the wholesale, nonprime mortgage lending industry, Mortgage Investment Lending Associates Inc. is making big headlines, earning a lot of respect and contributing significantly to the Snohomish County economy.

Started 20 years ago by Everett native Layne Sapp, who began attending real estate investment seminars as a teen-ager, even before graduating from Marysville-Pilchuck High School, MILA has recently become an “overnight success,” bursting forth on the mortgage scene with the financial equivalent of a fireworks show.

After his business grew too big for the offices he opened in Lynnwood’s Fisher Business Center in 1989, he bought the former Safeco office building near I-5 and 244th Street SW in Mountlake Terrace last year for his new headquarters and his staff of 350.

Then, in May, Sapp announced he was buying a long-empty office building that formerly housed Boeing operations at the Quadrant I-5 Center in downtown Lynnwood. Along with being a major boon to the local real estate market, the building will provide room for an additional 800 MILA employees over the next 36 months, plus room for other tenants. That will boost the firm’s payroll to more than 1,000 people locally and another 200 nationally at branch offices in Arizona and Missouri.

MILA serves a broker base of 10,000 companies in 27 states that employ more than 25,000 loan officers and processors. In the coming year, Sapp anticipates expanding his services to 18 more states and hundreds of new broker contacts.

The company’s residential mortgage paper is bundled into packages of $50 million to $100 million worth of real estate loans for Wall Street investors. The firm’s annual mortgage volume grew from $279 million in 2000 to more than $400 million in 2001, then reached $550 million in 2002. Last year, MILA expanded its business to $1.5 billion worth of mortgage activity. This year, the company is processing loans at a rate of $300 million per month.

Sapp’s business has grabbed chunks of market share by taking a decidedly fresh approach to mortgages, focusing on the vast numbers of borrowers who need tailored financing for their individual circumstances and then providing loan closures so fast that his competition can’t keep pace. He makes everything so easy that brokers — and borrowers — love doing business with him.

“We believe you have to understand the borrower’s needs. People should be able to buy a mortgage in a day, like buying a car,” Sapp said, an approach that translates into offering brokers more than 400 varieties of loans to custom-fit borrowers’ needs with same-day service rather than the industry’s traditional 30-day closing period.

That’s even more unusual, considering MILA specializes in financing for nonprime borrowers with less than sterling credit or financial situations that preclude a usual bank loan.

“Our loan failure rate is about 3 percent, only about 1 percent worse than for prime lenders,” he said. “The industry average is 4 percent. We attract prime customers, but many don’t have a down payment or lack some other requirement in traditional lending profiles. But they’re still good risks.”

The Mortgage Bankers Association is projecting $2.4 trillion in mortgage obligations to be processed this year, even with rising interest rates. According to the National Mortgage News, MILA ranked in fourth place in the first quarter of this year among the nation’s top 20 subprime residential lenders.

Sapp has succeeded by hiring seasoned managers who know the mortgage industry, and bright, personable staff who can keep up with the hectic pace and provide impressive customer service. He knows the mortgage market in depth and how to pace his company’s growth.

But the real difference between MILA and other mortgage lenders, Sapp said, is in the $10 million worth of software programs he has developed with a team of software engineers over several years, a collection of bits and bytes impressive enough to earn MILA a recent ranking among Mortgage Technology magazine’s Top 25 Tech-Savvy Lenders.

Sapp’s proprietary software — DecisionPoint and AccessPoint — give MILA a highly competitive edge in the marketplace.

DecisionPoint, for example, checks 250 different loan criteria and 1,600 financing rules to find a perfect match for each customer’s needs. AccessPoint allows brokers to check the process of the mortgage approval in real time on MILA’s Web site.

“If we only rely on employee training, methodology and individual management styles, our results would be very inconsistent,” Sapp explained. “By using Internet and computer technology to process loans, our results are consistent all the time, from all over the country. The software formats outline exactly what to do, what questions need to be answered, what financing packages are available. By controlling the loan process we are able to satisfy customers in far less time than our competitors, every time.”

Sapp’s management style promotes a philosophy of exceeding customers’ expectations, and his technology makes that goal possible, he said.

“We are revolutionizing the way the mortgage industry is run in this country. We know how to create the ultimate customer experience and how to manage and grow our company. Because so much of this business is mathematical, our software enables us to know how we’re performing and how to grow or change.

“For instance, if we want to buy and market $7 billion in mortgages, we know exactly how many people to hire, how many mortgages they can process in a day and how much space we need for them,” Sapp said, “and all of that helps us provide the ultimate customer experience.”

More information about MILA Inc. is available on its Web site, www.mila.com, or by contacting the company at 800-332-MILA.

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