The Challenge

Silverton Mortgage made a strategic decision to begin renovation and construction lending in 2018. They were starting with a blank slate: no program, no policies, no systems, no procedures, no team. The first step was to get the right person on board to develop and lead the department, and they found that person in Rick Scott, who became the Director of Construction Lending at Silverton Mortgage.

Scott has years of experience in the construction lending space at multiple institutions, all of which used their own homegrown systems to manage construction-to-perm loans. He found the experience of using home-grown systems to be lacking in many areas. “Internally built systems are very laborious,” says Scott. “While working with our internal programmers to find a solution, it became clear that they did not understand the full scope of the construction lending process. The result they delivered wasn’t what I needed for my use case,” said Scott. “This situation repeated itself in various circumstances, and in the end I was left with software that didn’t work quite right for what we needed.” With this challenge behind him, Scott foresaw that for Silverton to succeed, they must invest in a third-party solution that on-site teams can use to manage their loans.

To start laying the foundation for the new program, Scott was engaged in determining what lines of credit they were going to use, and what property types, LTV ratios, and FICO scores they would accept. Once that was established, he began writing all of the policies, procedures, documents, disclosures, construction loan agreements, and draw schedules. While that process was going on, Silverton also began looking at software systems for construction loan management. The team Scott assembled has worked on everything from spreadsheets, to homegrown systems, to vendor software providers. With experience like that, the team knew specifics of what they were looking for in a software solution for Silverton.

The most important thing they were looking for in a program was the ability to see the entire portfolio and evaluate performance easily. Says Scott, “Having been in this industry for 30 plus years, I have found that it doesn’t matter how good your pricing is, how good your program is, how high an LTV you’ll do, etc., if your portfolio doesn’t perform, it’s going to be a short-lived product. So therefore, it was very important to me to have something in place that allowed me, at any point in time and from different angles, to be able to evaluate the performance of the portfolio.” A quick yet thorough portfolio evaluation helped Scott and his team make pivotal decisions at the right time.

Secondly, they wanted a software with robust billing and servicing that could calculate interest only loans. And third, they desired a software that was user friendly. Too many of the home-grown software options in the past had been clunky, awkward to use, and were missing many features, causing Scott to create inventive work-arounds. This time he wanted to start off with a software that could support him and his team from day one.

After completing an evaluation of four different software vendors, Silverton chose Land Gorilla. “Silverton needed a software solution that allowed us to grow, and that made Land Gorilla the right choice for us,” says Scott.

The most important thing they were looking for in a program was the ability to see the entire portfolio and evaluate performance easily. Says Scott, “Having been in this industry for 30 plus years, I have found that it doesn’t matter how good your pricing is, how good your program is, how high an LTV you’ll do, etc. If your portfolio doesn’t perform, it’s going to be a short-lived product. So therefore, it was very important to me to have something in place that allowed me, at any point in time and from different angles, to be able to evaluate the performance of the portfolio.” A quick yet thorough portfolio evaluation helps Scott and his team make pivotal decisions at the right time.

Secondly, they wanted a software with robust billing and servicing that could calculate interest only loans. And third, they desired a software that was user friendly. Too many of the home-grown software options in the past had been clunky, awkward to use, and were missing many features, causing Scott to create inventive work-arounds. This time he wanted to start off with a software that could support him and his team from day one.

After completing an evaluation of four different software vendors, Silverton chose Land Gorilla. “Silverton needed a software solution that allowed us to grow, and that made Land Gorilla the right choice for us,” says Scott.

The Solution

“The Construction Loan Manager^TM allows us to do a lot of our functions with less manpower,” says Scott. “In-house home grown systems cost money to build and maintain, and you don’t get something as developed as Land Gorilla. With their software, we actually save money by maintaining our headcount even as we increase loan volume. With Land Gorilla you can work more efficiently with fewer people, plain and simple.”

A software system that was user friendly was a main point for Silverton. Says Scott, “The Construction Loan Manager format follows very closely the way the transaction goes from beginning to end. From inputting the builder, to the loan, to setting up budgets and draw schedules; it’s set up so we don’t miss a beat and everything is in proper order.”

Once the loan closes and goes into the The Solution “We actually save money by maintaining our headcount even as we increase loan volume.” Rick Scott, Director of Construction Lending, Silverton Mortgage construction phase, Silverton’s construction loan administrators are 100% responsible for the loan and the relationship with the borrower and builder. Says Scott, “Our loan administrators work harder than anyone else. It’s their relationship with the builder and borrower. They are responsible for managing change orders, tracking the progress of the loan, and they are alerted if the project goes too long without an inspection or a draw, and all of this management is significantly easier on the Construction Loan Manager.”

Silverton manages the construction loan from pre-close through post-close with their own team; however, they do use the Land Gorilla team for inspections services throughout the construction phase. Land Gorilla contracts with over 11,000 professional inspectors across the United States, and offers fast scheduling and delivery of the inspection report. Scott stated, “We are pleasantly surprised at the turn times and at the quality of the inspections. In the past, I’ve worked with inspectors who are also appraisers, and right now I see them putting their focus on appraisals in this hot refi market. They are plentiful right now and pay better than inspections. I was concerned that would be the case with Land Gorilla, but it’s not. The inspectors Land Gorilla contracts with are very professional and do their job quickly and efficiently, which we greatly appreciate. We also appreciate the volume of images we get from inspections, and how thorough the inspectors are. It’s incredibly helpful to us as we approve draw requests in a timely manner.”

“I can’t think of a situation, or a feature, that I want Land Gorilla to cover in the construction management process that it doesn’t already have a solution for,” says Scott.

The Results

Silverton has been with Land Gorilla since the inception of their construction-to-perm department. When they made their first loan, Land Gorilla Construction Loan Manager was already implemented so Silverton could hit the ground running. In their first 6 months as a construction-to-perm department they increased their loan volume by 333%.

Silverton has been very pleased with their growth, especially as the product didn’t exist before Scott joined the company. “Since initiating a new product along with a solid marketing campaign, we’ve had success to the extent that we’re seeing interest from a few builders that we will be meeting with in the near future,” says Scott.

“It’s a nice start,” says Scott. “We are happy with the loan volume and we’re pleasantly surprised to see that our current projects are still moving forward at their expected pace, even through this pandemic.” Silverton looks forward to continued growth and performance of their construction-to-perm portfolio.

The Future

“We are seeing other companies shrink their CTP programs, but we are staying open and are ready to take on that demand,” says Scott. “I think there are consumers out there who are ready to build or renovate, but feel a little more cautious and concerned over the permanence of their jobs, so they are holding off until we come out the end of this pandemic. We understand that, so we will hold steady until they are ready.”

Not only does Silverton look forward to a great future with their clients, but also with Land Gorilla. “Any time we need help we can turn to Land Gorilla and our Account Manager is there for us to provide guidance, present us with useful tips, and offer support any time we need help. If we want a specific result, our Account Manager will work with us to get to that outcome,” says Scott. “Even on short notice, our Account Manager is there for us. It’s just simply a fact that everyone at Land Gorilla has done a fantastic job.”

“As we grow, and as Land Gorilla grows, we are happy we are able to be a part of that conversation,” says Scott. “ The system itself is very good, and we look forward to a long and lasting relationship.”