Bill McCue
Title: President, McCue Mortgage
Age: 67
Experience: 43 years
A legend in Connecticut banking circles, Bill McCue has taken the mortgage firm his father founded after World War II and turned it into one of the largest independent mortgage lenders in the state of Connecticut. He spoke with The Commercial Record about getting his start as a lender and his hopes and plans for improving the state of the Connecticut housing market.
Q: I understand your father started McCue?
A: Yes, he started it back in 1949. I took over in 1977 and have been running it since then, and it won’t be long before my daughter Kate will take it over from me.
Q: Three generations – that’s impressive. Did you always know you wanted to work in the family business?
A: No, I did not. I started out in commercial banking, did construction lending, then did brokerage work for the bank. But it seemed like all the people above me weren’t moving anywhere, so I didn’t see a chance [to advance my career there]. So I thought, let me take a chance on this, and took over from my father. My father had developed the company into a success, but by the 1970s he was getting tired and wasn’t feeling that well, and the business had waned, and then I took over, with my youthful energy, and was able to get the business growing again at a pretty decent clip.
Q: Independent mortgage companies are certainly a huge part of the industry landscape right now, but I understand that wasn’t the case in the 1970s, and certainly not before then. What led to McCue pioneering that?
A: When my father got out of law school in 1932, there were no jobs. It was the depths of the Depression. So he started working for Roosevelt’s campaign, and when the New Deal started he got a job with the Homeowner’s Loan Corp. They were using government money to redeem loans which were being foreclosed on by the banks. That was the agency that eventually led to the Federal Housing Administration. So he was involved with the early years of that, and then during the second World War he was involved with identifying and locating housing close to the war materials plants. We in Connecticut refer to ourselves as the arsenal of democracy, between the guns and the helicopters and jet engines that are built here. So there was a need for the people that worked in the war plants to be able to live close to the war plants, so they could get there if there was a crisis or attack. And then after the war he worked for another mortgage company. And then sort of like me, I think he felt, well, I’m not going anywhere here, I’m going to start my own – or in my case I took over his. The first thing McCue did was make loans to veterans, through a program sponsored by the state of Connecticut.
Q: You mentioned that one of the ways your father helped grow McCue – and one of the ways you yourself did, through a somewhat different program – was getting involved with some of the state of Connecticut’s efforts to make affordable loans available to Connecticut residents. The housing market in Connecticut has been going through a pretty rough patch the past few years – do you feel like the Connecticut Housing Finance Authority and other agencies could be doing more of that today?
A: Well, when I started out, I was doing commercial construction lending. In the 1970s, when you made a loan on an apartment building, you’d lend 75 percent of the value when it was complete. And the good news was, it would be worth more … if it was worth $2 million when it was done, we’d lend a million and a half, the developer would have to put in, say, $150,000. And it all made sense, because it was worth more than it cost. Today, projects aren’t worth what they cost. There’s a real challenge to build multifamily housing [in Connecticut] – or really, any kind of housing. The Connecticut Housing Finance Authority plays a critical role, through the use of tax credit and the bonds they issue. … We need that, but even with that it’s a struggle.
Q: When would you say that switch was flipped, and projects stopped working in the way you described?
A: Well, it’s hard to say exactly because I got out of it and started doing residential [lending]. But I will tell you what I think was behind it. … The inflation of the late ’70s created a huge problem with costs. The costs of materials and labor continued to rise throughout the ’80s. The change in the tax laws of that era helped, but the costs were huge minus. Then we started to lose good jobs in Connecticut, in that era, the late ’80s. That hurt. And that really hasn’t stopped. So what it becomes is, "Why doesn’t the project work?" Well, at least in the urban areas, it’s that the rents that the market commands, minus the expenses of running it, simply don’t produce a net income that would create value in excess of what it costs. Take a 100-unit apartment building – the cost of building it in New York City, Boston and Hartford is probably not much different. But the rent you’re going to get in those three areas is dramatically different.
McCue’s Top Five Fixes For the Connecticut Housing Market:
1. Link new housing to transportation.
2. Reform the state’s lengthy foreclosure process.
3. Get abandoned/distressed properties back to homeowners.
4. Use the CHFA to create a strong secondary market for Connecticut.
5. Attract better-paying jobs to the state.
