Too little to be big, Lake Tahoe Mortgage agrees to buyout

Harry Gordon spent 13 years building a thriving mortgage brokerage in northern Nevada only to realize that he was painting himself into a corner.

"We'd reached a point where we were too small to be big and too big to be small," he said after closing the sale of his Lake Tahoe Mortgage Corp. to Nations Home Funding Inc.

Nations Home Funding, a privately held company headquartered at Brentwood, Tenn., didn't disclose terms of the transaction.

While there's a profitable niche for tiny mortgage brokers, Lake Tahoe Mortgage with a growing staff of nearly 50 and offices in Reno, Truckee and Minden increasingly was beginning to bump into the big players in the market, said Gordon.

And that meant the Reno-based brokerage would need to grow in a hurry and add services such as mortgage banking to stay in the game a big job for the company.

But even as Gordon was considering his options, he had struck up a friendship through an industry think tank with Jim McQuaig, vice president of Nations Home Funding.

They played golf together, had dinner at one another's homes and became friends.

"We recognized that we had a very common beliefs system," Gordon said.

At the same time, McQuaig's boss, L.H. "Mike" Hardwick III, the president of Nations Home funding, was looking for a way to further widen the company's presence in West Coast markets.

Nations Home's operations have mostly been in the Southeast, although the company operates branches in Phoenix and Seattle and recently acquired a Southern California office.

"The ability to get into the Reno and Lake Tahoe area was interesting to us," Hardwick said last week.

The Nations Home team also liked what it saw of Lake Tahoe Mortgage during the six months of work on the deal.

"Harry Gordon has slowly built it into a very strong company," Hardwick said.

Strong enough, in fact, that Nations Home doesn't expect to make any immediate personnel changes at Lake Tahoe Mortgage and also expects to continue working under the Lake Tahoe Mortgage brand in northern Nevada.

Further, Hardwick decided that press releases on the acquisition would describe it as "a merger of equals."

"They are our equals in a lot of ways," he explained.

The combined companies will operate branches in 15 cities and will have more than $1 billion in annual residential mortgage closings.

Nations Home Funding was founded in 1998 by Hardwick and McQuaig. They've set a goal for the company of $10 million in closed loan volume by 2010.