Hartford Business Journal

14 Hartford Business Journal • February 2, 2015 www.HartfordBusiness.com RepoRteR's Notebook Hartford Club soliciting $2M to pay off debts The Hartford Club formally has begun soliciting $2 million from investors to help pay off its debts, including a defaulted mort- gage that landed its historical 46 Prospect St. home in foreclosure last year, according to documents filed with the U.S. Securities & Exchange Commission. The Hartford Club's fundraising arm — the 1873 Group, named after the club's founding year — filed paperwork with the SEC Jan. 7 saying it was seeking $2 million from investors in exchange for an equity stake in the organization. Former Hartford Club President Larry Brown is serving as the managing member of the 1873 Group. Brown first proposed the idea of rais- ing capital from Hartford Club members in 2013 as a way to relieve the organization of $1.4 million it owed Berkshire Bank for its property. At the time, the club was seeking $1 million through member investments to payoff the Berkshire debt. After not making mortgage payments for 18 months, the club's Prospect Street home landed in foreclosure. There was a foreclo- sure sale date scheduled for June 28, 2014, but the club appealed that decision, which remains pending. Since then, Hartford Club has been trying to negotiate with Berkshire Bank and raise money from its members. The filing with the SEC is the formal declaration that the club is seeking investor money. Brown declined to be interviewed for this story, but said in an email the process of getting 1873 Group established was more complex than initially thought, which is why the SEC filing came more than a year after he proposed paying off the bank debts through member contributions. Brown also said discussions with Berk- shire Bank are progressing, and he claimed December was a good revenue month for the club thanks to its events business. — Brad Kane CEO car chase web series to start in Hartford A cross-country car chase and Web series predominately featuring CEOs and other business leaders will rev its engines in Hartford this year for the first time. The Fireball Run, which is in its ninth season nationally, was founded in 2007 by an Orlando, Fla., production company of the same name, using businesspeople and their automobiles as the main draws in a Web series featured on Amazon Fire and Google Play. The race, which enlists about 40 teams, hits eight destinations in a cross-country route, with each team participating in a Trivial Pursuit-like contest; questions are based on historical and cultural facts of each particular destination. The whole contest is then packaged into a 13-episode Web series. The ninth season of the Fireball Run is called Space Race, and it will start in Harford. Forty teams will compete and travel down the East Coast and Mid-Atlantic going from Hart- ford and finishing at Cocoa Beach in Florida's Space Coast. Other destinations include Queen Anne's, Md.; Williamsburg, Va.; Topsail Island, N.C.; Florence, S.C.; and Liberty County, Ga. The first three days of the event will be Sept. 25-27 in Hartford, and the race will end Oct. 4 at Cocoa Beach. "We are going to try to put a different spin on Hartford," said J. Sanchez, executive pro- ducer of the Fireball Run. "The reputation is that it is this insurance capital, but we are going to show it is so much more than that … Hartford is a very art-centric community." Fireball Run anticipates a live audience of 85,000 people during the race. The show itself typically ends up with 1.7 million viewers for each season. — Brad Kane The Fireball Run car chase race will start in Hartford this September. P H O T O | C O n T r i b u T e d P H O T O | H b J F i l e from page 1 and south central Massachusetts. "Rates aren't the lowest ever, but they are approaching that.'' Other major home lenders — Webster Bank, American Eagle Financial Credit Union and Simsbury Bank & Trust Co. — say applications, too, are trending strongly. Webster is one of New England's largest mortgage lenders, with a $3.5 billon mortgage portfolio and 80 home-loan officers spread over four states. "We've seen a spike in January [home] loan volume,'' said Simon Tahan, who directs Web- ster's mortgage-banking operations. "There seems to be more confidence in the growth in wages and [property] values are coming back.'' Fueling the surge are first-time and move- up homebuyers; existing homeowners who missed out on the last major refi opportunity in 2013, when mortgage rates sank as low as 3.39 percent; and owners who bought or refinanced within the past three years and see a limited opportunity to shorten their paybacks to 15 or 20 years, from 30, to save money, lenders say. The mortgage rush buttresses area and Con- necticut Realtors' surveys that depict strong home sales and a growing pipeline of deals heading toward closing. Securing purchase financing is a key step in finalizing the sale. On Jan. 29, United quoted a fixed rate of 3.5 percent, with no prepaid, upfront interest or points, on a 30-year mortgage. As of Jan. 29, the U.S. prevailing fixed 30-year rate averaged 3.66 percent, down from 4.32 percent a year ago. "The general rule is, if you can save a percent, you should refinance,'' Lorey said. "If you can get a three and three-quarters and three and seven- eighths rate, that's good by anyone's measure.'' So strong is borrower demand for money to buy houses that American Eagle Financial Credit Union hit its weekly mortgage-appli- cation quota in just two days the week of Jan. 19, said President/CEO Dean Marchessault. Application volume at that time was up 20 percent from a year ago, Marchessault said. Two-thirds craved so-called "purchase mortgages" to buy properties, with mortgage refinancings comprising the balance. Lower rates get part of the credit, he said. "Our (application) flow is up,'' Marches- sault said, "because we have people on the street — mortgage loan originators — meet- ing with Realtors and following up on leads that come into our call center.'' In 2014, East Hartford-based American Eagle originated more than $125 million worth of home loans, an increase from 2013, he said. The typical conventional loan funded ranged from $150,000 to $250,000 to a wide spectrum of borrowers with solid credit scores. Shorter term, 15-year loans are popular with more borrowers, he said. American Eagle as of Jan. 29 quoted 3.625 percent for a 30-year fixed mortgage; 2.875 percent fixed for 15 years. "They like the notion of being able to pay that loan down a lot faster,'' Marchessault said. Another big mortgage lender in the Hart- ford region, Simsbury Bank & Trust Co., reports brisk mortgage business. Its 30-year fixed rate last week was at 3.625 percent. "We are definitely seeing an uptick in activity with the rates being almost again at their all-time lows," Simsbury Bank President and CEO Martin Geitz said. "We're definitely seeing an increase in refi activity being spurred by that, and we'll see where this all goes,'' Geitz said. Simsbury Bank has taken its quest for mort- gage borrowers beyond Connecticut. Before Christmas, it won permission from Connecti- cut bank regulators to open its first out-of-state satellite — a mortgage-loan production office in Rhode Island that will employ five. At United, a corps of three dozen commission- paid mortgage-loan officers — triple the number scouring the turf for loans — have fanned out across United's Connecticut and Massachusetts turf and are generating plenty of original mort- gage applications for the bank, Lorey said. At the same time, existing mortgage hold- ers are coming back, eager to trade a loan taken out just 18 months earlier at around 4 percent for one with a lower interest rate, lenders say. Also, borrowers who may have originated or refinanced their notes years ago and are now close to retirement, want a shorter length, 15- or 20-year mortgage. According to United's third-quarter financial report filed with securities regulators, the lender reported record quarterly origination volume for home loans in the July-September period. Its mortgage originations rose by $46 million, to $116 million, from the same quarter a year earlier. But it was the issuance of purchase mort- gages, not refis, that carried the day in volume terms during the third and fourth quarters, United said. In its fourth-quarter earnings report, United disclosed that mortgage origi- nations doubled to $122 million from a year earlier, with two-thirds issued to buy houses. Lorey said United is relying on the same num- ber of underwriters and other back-office staff to process both new mortgage and refi applica- tions. It is that efficiency, he said, that hopefully will avoid United having to curtail staff if, or when, the mortgage-demand spigot shuts off. Simsbury Bank, too, is relying on a shrunk staff of loan processors this time around, rather than repeat a staff buildup that required it to lay off a handful of back-office clerks, Geitz said. n No overhiring this time Loan Shopping Best CT counties to get a mortgage as of Jan. 12. Loan 5 Year Annual Best Funding Borrowing Property Mortgage Mortgage County Rate Costs Tax Payment Markets Index Hartford 65.21% $68,061 $24,396 $12,226 30.80 Tolland 67.06% $68,217 $22,906 $12,257 28.40 Fairfield 64.39% $68,388 $18,999 $12,292 23.40 Middlesex 64.82% $68,592 $20,894 $12,332 19.30 New Haven 62.08% $68,540 $24,423 $12,322 13.90 S O u r C e : w w w . H T T P S : / / S m a r T a S S e T . C O m / m O r T g a g e / m O r T g a g e - r a T e S # C O n n e C T i C u T

• Cover