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Douglas Schukar CEO USA Mortage
Thursday May 12, 2011--Douglas Schukar, CEO of USA Mortgage, the largest mortgage bank in the St. Louis area. David Carson

Even as the residential real estate market took a nosedive in recent years, Douglas Schukar found a way to grow his mortgage bank business and reach record results.

As chief executive and president of DAS Acquisition Co. in Creve Coeur, which operates as USA Mortgage, Schukar led the mortgage bank to $586 million in closing volume in 2008 and closed on more than $1 billion in loans in 2009 and 2010. The company's staffing likewise expanded, nearly doubling from 130 employees three years ago to more than 250.

This growth, spurred by a rise in refinancings and downsizing of competing mortgage brokerage firms, led Ernst & Young to name Schukar one of its Entrepreneur of the Year finalists for the Central Midwest Region this year.

Schukar was born in St. Louis in 1964 and graduated from Vanderbilt University with a major in political science and a minor in business administration. He spends his free time playing sports with his 5-year-old son, and devising new ways to drive growth at his company, which he says he expects to again exceed $1 billion in loan volume this year.

Even as other companies in the banking and real estate sectors shrink, DAS Acquisition is expanding. The firm opened its Illinois branch in December, in Maryville.

You were recruited out of college to work as a sales representative for Procter & Gamble. How did you choose sales as a first career?

Sales is in my blood. I inherited it from my dad and my dad's dad.

I worked for P&G in Greensboro, N.C., on Head and Shoulders, Pert Plus, Ivory, and Prell, and others. I worked there two years. I hated the job description of both my boss and my bosses' boss, which combined was an 8-year time commitment. I didn't want to spend that much time doing something I didn't like.

Next, I worked at a mergers and acquisitions firm. I worked there for one year and made $9,000 on one sale. It was an emotional roller coaster. I loved the job but made no money. I moved back in my parents' basement.

How did you start working in the financial services industry?

I wanted to find an industry where I could make money.

In 1988, two of my buddies were doing this job called residential mortgage loan officers. It was 100 percent commission, otherwise known as free labor. The paychecks were $900 or $1,000 (per loan) if you were lucky.

On June 17, 1989, I started working for Gordon Gundaker's mortgage company, Residential Financial Services Inc.. In two years, I became the No. 1 loan officer in that organization. They then sold out to United Postal Savings and Loan, and they then sold to Mercantile Bank. Mercantile Mortgage, which also included Roosevelt Federal and Mark Twain Bank, had 18 percent market share and was five times the size of our closest competitor. They sold to Firstar, which today is US Bank.

I'd been the No. 1 loan officer in St. Louis for about 9 years in the 1990s. When Firstar bought it, I resigned and went to LLC, which had been recruiting me, and became their vice president of St. Louis sales.

When I started working at RFSI, Linda Pring was running the mortgage operation, and she's now my executive vice president and chief operating officer.

How did you wind up buying the USA Mortgage name? was trying to go public in 2000, but by August, Nasdaq essentially tanked and the owners needed to sell off the firm. They approached me to buy the assets. In April 2001, the deal finally closed.

USA Mortgage was a great name here locally since 1994. I bought it with a plan of branding USA Mortgage locally and also of being the premier bank fulfillment center in the Midwest for residential mortgages.

We had 56 employees and $200 million in loan closings in our first year, 2001. By 2008, we'd reached almost $600 million, tripling the size of the company within seven years.

We believe this industry is a sales industry, and we believe in constant customer communication. We just don't think anyone else looks at it that way.

How did the Great Recession affect your business?

To a bank, a mortgage, unless it's a core product, is a necessary evil. They have to have a solution. The banks and credit unions learned that in the 1990s the hard way, where they'd say 'go to the big bank across the street for your mortgage.' The big bank would literally suck the whole banking relationship out from them. They had to create an outsourced solution, and nobody was really offering that here on a local level.

We really grew that, third party originations, to an almost $200 million part of our organization until the whole financial debacle happened in 2007 and 2008. Chase came out in February of 2008 and said, effectively immediately, 'we're stopping our third party originations in the country.' The big six in the financial world are much like the airlines, where one raises their prices, everyone raises. When Chase said they were exiting, everyone started to follow. But TPOs are starting to come back now (as banks return to that model).

Lax underwriting and mortgage companies led to the credit crisis. How has your company tackled that problem?

We employ technology that does an awful lot of fraud prevention and screening for us. The whole industry has fixed the problem and I really applaud the industry for stepping up and doing it. It allows me to put my head down on my pillow at night and be more comfortable. There are so many fraud detection tools out there now. The IRS has a form called the 4506T that, when executed, within 24 hours I can have a coded set of transcripts of your tax returns for the last two years, and that gets compared right away to the loan application.

We also employ a company called Data Verify, which does something called MERS Tracking — mortgage electronic registration system. In a nutshell, it allows me to see what properties are in your name right now.

We run it on every single loan that we do. Now the big six banks demand that it be done on every loan that they buy.

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