Other articles by Christie Smythe:

Developers looking for help with 44 E. Broadway condosDowntown Tucson condo developers seek buyer with 'a lot of cash'Buyers, investors left in lurch as builder failsChristie Smythe: Lack of land buyers hints that market's still fallingAZ Discount Marine scales back locations, files for Chapter 11Real Estate by Christie Smythe: Condo project markets to lesbians1st Magnus creditors, employees still wait for money a year laterPreview: Financial scars deep a year after Tucson's First Magnus collapseEncouraging signs in Tucson housingSigns of stability emerge in Tucson housing market

Office and Clerical
ChartOne
Site Supervisor Restaurants and Clubs
Buffalo Wild Wings
Cooks, Greeters, Servers, Cashiers, and Bartenders Administrative & Professional
Confidential
Property Manager Health Care
confidential
Physician wanted Employment Information
Plant Manager Engineering
IOTA ENGINEERING
MECHANICAL INSPECTOR Finance and Accounting
Tohono O'odham Nation
Controller and Assistant Controller

StoneWater Mortgage Corp., the new company formed by First Magnus Financial Corp. executives, plans to start funding loans next month, said the new company's president and chief financial officer.

StoneWater hopes to operate in more than 30 metro areas by the middle of next year, said Karl F.W. Young, former chief operating officer of First Magnus, which filed for bankruptcy last summer.

"I believe StoneWater has the potential to emerge very quickly to become a top-20 national mortgage company," Young said in an e-mail.

He added that he would one day like to see the new business grow into a public company or align with a major financial institution.

The new company is set to employ 75 people in Tucson by July 1, Young said. He said he expects the number to rise to 200 by the end of the year and 400 by this time next year.

"While we don't know the specific numbers around this, we applaud any private-sector investment in the Tucson region in these tough economic times," Laura Shaw, spokeswoman for Tucson Regional Economic Opportunities Inc., said in an e-mail.

The emergence of StoneWater comes less than a year after the sudden collapse of First Magnus, a Tucson-based mortgage lender with national reach. The company laid off 5,500 workers throughout the country and filed for bankruptcy last August.

The new company is housed in First Magnus' custom-built headquarters at 603 N. Wilmot Road, which is co-owned by First Magnus chairman Thomas Sullivan Sr.

Former First Magnus employees expressed bitterness over the sudden closure in part because they didn't receive final paychecks from the lender before it entered liquidation bankruptcy. During bankruptcy proceedings, First Magnus executives said that they were trying to save the company up until the collapse and didn't realize they wouldn't be able to pay employees.

The executives gave $2,000 checks as gifts to more than 560 former workers in Tucson but not to employees in other areas. Last week, several former employees reported receiving some of their back wages, but so far only 5 percent of their claims.

Young said StoneWater will be different in some ways from First Magnus but will incorporate some of the former lender's strengths, such as First Magnus' use of in-house software to make the lending process more efficient.

Lending, however, will be more conservative, Young said.

While it stayed largely away from loans labeled as subprime, First Magnus did do substantial business in "Alt-A" loans, which were offered to borrowers with high credit scores but have been deemed risky by investors.

Young said StoneWater will stick largely to "agency" loans — those that fit the guidelines of government agencies like the Federal Housing Administration and the quasi-governmental mortgage buyers Freddie Mac and Fannie Mae.

Initially, StoneWater will also do business only as a wholesale lender — one that provides funding for mortgages to brokers — not a retail lender that interacts with borrowers, Young said. No lending will be conducted in Tucson, he said.

Business may not be easy for StoneWater, which is emerging at a time when credit markets have tightened and some borrowers may find it more difficult to qualify, said Mark Ross, chief executive of Tucson lender Prime Capital.

"A new company coming in is going to be facing the same challenges," he said.

Young said he wanted to keep the new company in Tucson because "I love Tucson" and because there were already many skilled mortgage professionals in the area. The name, StoneWater, is meant to represent a business that is "solid and stable as well as swift and fluid," he said.

Young called the collapse of First Magnus "the most traumatic experience of my life," and added that he had hoped the former employees would have already been paid, but said that was beyond his control.

"That only thing that is within my control is starting a new company and providing people with the opportunity to move forward," he said. "I also hope that there are more people in Tucson that would prefer StoneWater stay here and return Tucson to a position of national prominence in the mortgage industry than not."