Title Town

The lunchtime scene at Nationwide Title Clearing, a fast-growth 315-employee mortgage-processing firm in north Pinellas County, is like being back in high school.

Nearly every employee takes lunch at the same time. Indeed, the rows of cubicles inside the gated 38,000-square-foot complex, a former Christian church and daycare center, are a virtual ghost town during lunch. The Palm Harbor-based company, partially in response to employee requests, sets daily lunchtime from 12:30 p.m. to 1 p.m.

Some folks gather inside the cafeteria to eat. Others eat lunch at metal picnic tables, where one munches on Doritos and yogurt. Some people huddle off to the side, chatting and smoking cigarettes. Still others eat by themselves while reading a book, curling up against a wall. On one recent Tuesday, a few people left the campus and returned with McDonald's bags.

Everyone at lunch, however, has one thing in a common: A Nationwide Title Clearing employee ID badge. The badge is access to the company, a unique — and complicated — success story among Gulf Coast businesses.

On the one hand, Nationwide's growth, in employees and revenues, defies the recession. Annual sales, for instance, have more than doubled since 2008, to at least $20 million.

On the other side, though, a state attorney general recently accused Nationwide of unethical mortgage industry practices. Moreover, several company officials and founders have ties to the Church of Scientology, a somewhat controversial religion with a sizable presence in Pinellas County and Clearwater, both in members and in property it owns.

The company continues to fight allegations of wrongdoing. But the Scientology connection, say Nationwide executives and some local officials, are irrelevant to anything at the company.

The growth side to Nationwide, meanwhile, is impressive: In the past five years Nationwide has become one of the largest firms in the country that focuses on post-closing services for residential mortgages.

That means clients pay Nationwide, essentially a middleman, to handle the reams of paperwork and document verification a mortgage requires, from lien releases to title searches to final documents. Clients, according to the company, include eight of the 10 largest mortgage firms and banks in the country, in addition to a few federal agencies.

It's labor-intensive work. Each document, say company executives, goes through an eight- to 12-step approval process. Nationwide's clients have mortgages in every state, which covers more than 3,500 jurisdictions. So the firm's employees must know the laws and regulations for wherever they process paperwork.

Moreover, the company's proprietary document-tracking system enabled it to stay relevant to clients when the housing bubble burst. “We filled a need,” Nationwide Vice President of Sales Michael O'Connell says. “Our ability to predict what was coming has paid off.”

So much so that Nationwide's annual revenues are up 85% since 2008, from $9.2 million to $17 million in 2011. The payroll more than doubled in that time, from 86 employees in 2008 to 222 at the end of 2011. The growth surge has continued into 2012, where through September Nationwide had 315 employees.

Still, Nationwide's fast growth comes with an asterisk because of its ongoing legal allegations.

'Undermining integrity'
The state of Illinois, in fact, sued Nationwide earlier this year for alleged violations of the Illinois Consumer Fraud and Deceptive Practices Act. The state attorney general's office says Nationwide filed faulty documents with Illinois county recorders.

The lawsuit, filed in Cook County Circuit Court, asks a judge to impose civil penalties against Nationwide. “The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process,” Illinois Attorney General Lisa Madigan says in a Feb. 2 statement.

Nationwide CEO John Hillman, in an interview with the Business Review inside Nationwide's campus in mid-September, declined to comment on specific allegations in the Illinois lawsuit.

Hillman, though, denied Nationwide engages in any unethical practices, denials that include robo-signing. That term entered the lexicon in late 2010, when several big banks, through employees who signed documents they allegedly didn't read, were accused of speeding up the foreclosure process.

“We're not a foreclosure shop,” says Hillman. “We've never done that. We have employees who sign a lot of documents, but they review every piece of the documents before they sign.”

Adds Hillman, regarding the Illinois lawsuit: “I'm sure it will come to a good result soon.”

At least one other entity, outside government, has also accused Nationwide of unprincipled mortgage practices. St. Petersburg attorney Matthew Weidner, who specializes in foreclosure defense cases, made some allegations against Nationwide on a blog post in 2010.

Nationwide sued Weidner for slander and libel, in a case that was ultimately settled out of court. Weidner declined to comment on the specific case, saying he signed a confidentiality and non-disparagement agreement. Weidner, nonetheless, did say he believes the entire mortgage processing industry remains an overlooked source of some lingering issues in the housing market malaise.

“This industry came out of nowhere,” says Weidner. “There are no rules, no nothing.”

Religious matters
Fending off unethical mortgage industry allegations is a much different challenge than the perception of mixing religion and business. That could be why the affable Hillman — who sometimes smilingly tells visitors to call him Johnny — grows slightly defensive when asked about Nationwide's connections to the Church of Scientology.

The link is most visible in a system the company uses created by Scientology founder L. Ron Hubbard. This fact is highlighted on Nationwide's job application, which, in the middle of the legalese language, states the company actively utilizes a nonreligious management and processing system Hubbard created.

Hillman says the secular system is akin to Six Sigma, a uniform work process that makes everything run more efficiently. At a place like Nationwide, where speed and teamwork are vital, a simple system is a key component of the success, company officials say. The firm, adds Hillman, also uses Hubbard's system to analyze trends and improve quality control.

But Hillman bristles at accusations that Nationwide is a Scientology-controlled business merely because the firm uses Hubbard's work-processing techniques. The church doesn't own the company, according to Florida Secretary of State documents, though several people with current or past connections to Scientology are officers and directors.

“Scientology doesn't play a role in the company environment,” Hillman says. “Scientology doesn't play a role in what we do. There is no connection, other than I'm a Scientologist myself. It's a nonissue.”

Connie Davis, president and CEO of the Greater Palm Harbor Area Chamber of Commerce, says religion never comes up in her conversations and work with Nationwide employees. Nationwide is a major chamber supporter.

“I have nothing but good things to say about the company as a chamber member,” says Davis. “Anything other than that, I'm not aware of.”

Hillman, furthermore, says he has no idea how many Scientologists work at Nationwide. He threw out a guess once, when the Tampa Bay Times wrote a story on the company in early 2011, but refuses to speculate now. Says Hillman: “I don't know how many Mormons are here and I don't know how many Catholics are here.”

Hillman says he understands the genesis of the Scientology questions, given the religion's sometimes negative perceptions, but understanding doesn't equal agreement. “It's odd,” says Hillman, “because in what other company does the religion matter?”

Perfect chain
Nationwide was founded in 1991 in Southern California. At one point Hillman says the company shared offices with Walt Disney Imagineering in Glendale, Calif. A son-in-law of Ivan Kezsbom, one of several Nationwide co-founders, Hillman joined the firm 1995. Hillman worked in human resources, and he also ran the IT department before he was named CEO in 2006.

Hillman says his management style is to walk around. He will check in with various departments regularly, but he tries to stay out of decision-making until it's absolutely necessary. “I allow people to do their jobs,” says Hillman. “I want to empower my employees.”
Nationwide relocated to Palm Harbor in 2002. In its first few years on the Gulf Coast, Hillman says the company was mostly stuck in a cyclical market. Revenue growth was stagnant. But a revamped training program in 2008 partially led to the growth spurt. The company also recently enhanced its incentive program for employees.

Another area of improvement for the company in recent years has been in the mailroom — a bustling hub of 30 employees. That's where the company sorts a vast amount of documents, both coming and going. The system for what goes where, executives say, is constantly refined to make it smoother and more efficient.

Hillman and other Nationwide officials hope the latest growth boost for the company will be PerfectChain, a trademarked and proprietary system the company launched lasts year. PerfectChain, says the company, detects and reports any issues on recorded documents related to a mortgage that could hold up a sale.

Technology innovations like PerfectChain, says Hillman, is where Nationwide's future lies. The IT infrastructure budget, adds Hillman, is the company's biggest expense.

Yet while Hillman aims for more fast growth, he also wants to make sure Nationwide sticks to its niche: research and processing. Says Hillman: “I don't want to stray too far from what the company is good at.”