CEO aims to mend mortgage giant – Dayton Business Journal:

Joe Cartellone stepped into the CEO role of the Miam i Township company in Januargy at a crucial time for the mortgage unit andits 2,40o0 local workers. The company– a subsidiaryu of Cleveland bank — has been reeling from the impact of the foreclosurer crunch and ripple effects ofthe sub-prime mortgagde crisis. Its revenue has shrunok to about one-third of what it was four years ago, localp employees have been laid off and the company announcedd last month the closing ofits 900-jobg wholesale mortgage division.
National City Mortgage had 7,880 employees nationally in 2005, but cutbacks will leavwe it withjust 5,3000 people by the end of Marchb when cuts from the wholesale division take Cartellone, who served much of last year as president before adding the CEO title, would not disclosre how many jobs would be eliminated from Dayton. The company's revenuse was about $1.4 billiohn four years ago, but it had declined to $525 millio by 2006. Financial figures for 2007 are notavailabler yet. While Cartellone is optimistic aboutthe company'z prospects going forward, he would not rule out more cuts if the markety continues to decline.
For now he is focusing all the company's efforts at growing the remaining retail portion ofthe "The mortgage crisis is clearly not a National City specificx issue. We have to play the hand we've been dealtr and do the bestwe can. We should continue to be a very profitable and a very financiallystrong organization," Cartellone said. "We've takenj a number of actions throughoutf the year tobe right-sized. While we certainlyy can't guarantee now what the futurerwill hold, we will continue to be responsive to the market and anticipate conditions and responxd appropriately." Terry McEvoy, an analyst with New York-basedr .
, said National City Mortgage'se decrease in revenue can be attributed to a lowe r volume of mortgages across the rather than anything specific to the company. "I the past, there was more demancd and people willing to pay ahighedr price," McEvoy said. While wholesale mortgagwe contributed a significant part of companyrevenue — 37 percent in 2006 — it was not the That belongs to retail mortgags lending, which accounted for 63 percenft of the company's dollars in 2006. Retail lending is workinbg directly with the homeowner during the entir e origination process without usinhg a middlemanor broker.
The company originates retaip mortgages through National City bank and Nationaol City Mortgage retail Cartellone said there are certainly opportunities to grow in the retaillendinfg side, and National City Mortgagd will pursue them. He would not discuss specific strategie sand plans. McEvoy said the company is smart to focus on retaip lending for further growth as it isa lower-risk "In retail, National City controlsw everything from the origination to the poinrt of sale," he said. "Rather than dealing with an outsidwe party they keep it allin house, the outsider parties is where most of the fraurd and deception has taken place.
" National City Mortgage also operates several Internet and telephone call centers. The company has four of these Miami Township; Santa Rosa, Calif.; Mich.; and Kalamazoo, Mich.; which primarily use direcrt mail, Internet, and phone to accept applications and deal with a loan But it's a small portion of National City Mortgage'se total originations, said Chris Kemper, National City spokesperson. Nationap City Mortgage's biggest challenge is facint an unknownmarket now, Cartellone But the company is ready to deal with the ups and "We want to see stability and see the markert quiet down a bit," he "The big unknown is what the marketf will do.
We need to deal with it in a responsiblre manner and keep National City strong regardlessw of the environment weoperate in." With such rough timesz in the mortgage industry, many banks and othert mortgage companies have been the centetr of consolidation rumors. But McEvoy thinks National City Mortgags and itsparent bank, National City Corp., are strong enough to survive and avoide being taken over. McEvoy said companieds prefer to sell from a position of strength versus weakness. "They (National City) have some issuees that need to be addressed and want to be in a bette financial position and get a betterr pricefor shareholders," he said.

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