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Posted: February 01, 2010

Executive Edge: Sue Allon

Bringing oversight to the mortgage industry

Lynn Bronikowski

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Sue Allon sympathizes with people stung by foreclosure and the mortgage industry meltdown.

"If you grew up the way I did, you'd be motivated to not be poor, so I can sympathize with people who lose their homes," says Allon, 51, who last year founded Denver-based Allonhill, a financial services firm that brings oversight to the mortgage industry by digging deep to review loans for such diverse segments as major banking institutions, government agencies, hedge funds, institutional and private investors. "We didn't even have a home to lose, but we did get evicted a lot. It was tough times just to pay the rent and keep the utilities on."

The daughter of a Colorado Springs auto mechanic and stay-at-home mom, Allon attended Colorado College on full scholarship and majored in economics.

"I had an aunt who was one of the first woman ‘landmen' in oil and gas drilling. She'd pull up in her '69 Camaro convertible wearing a Chanel suit, and I saw what a tough businesswoman she was," says Allon, who in 1997 founded The Murrayhill Co., which pioneered the concept of independent third-party oversight of loans and servicers. In 2004, she sold that company - named for the Pittsburgh street on which her husband, Harvey, grew up - and emerged from retirement four years later to found Allonhill, which in September 2008 employed four and today employs 51 full-time, plus 125 contract analysts.

"This is the Super Bowl for the mortgage industry," says Allon, who insists she won't watch its comeback from the bench and intends to employ hundreds over the next several years. "My mission is to change the mortgage industry, restore its credibility and bring integrity back."

She bristles over bad industry practices such as no-document loans.

"The only no-doc loan should require 100 percent down," she says, laughing. "And I once listened in on a call with a borrower whose income didn't qualify her for the loan, so the processor said, ‘I can print you another W-2.' I'm disturbed by stories like that. The industry could have done better, and I was not alone in my thinking."

Allon wrote white papers offering solutions - firing them off to Colorado's congressional delegation and beyond, including one that landed in the hands of Gov. Bill Ritter.

"I ran into him in the airport on my way to New York, and he thanked me," Allon says. "By coincidence, he was having lunch with (Federal Reserve Chairman) Ben Bernanke the next day and said he'd give him my paper. Some of the mortgage modifications around securitizations that have been implemented were suggestions in my paper, so I like to think that Bernanke may have read my paper."

Hitting Wall Street wasn't always easy, Allon says, recalling a trip to New York where in the early days of her company she had to do a major presentation to investors. She had her then-18-month-old daughter in tow and no nanny that day.

"I wondered what I was going to do, when the concierge at the hotel looked at me and said, ‘I'm very good with children,'" recalls Allon, who left Natalie, now 12, in his charge. "When I returned from my two-hour meeting, she was almost running the place. He really was very good with children."

Today she's optimistic about the economy, describing the Wall Street trading floor as back to life when a year ago it was "the land of the living dead."

"The floors are jammed again with traders; the deals are back; bonds are back," says Allon, who serves on the boards of National Jewish Hospital and Colorado College. "I like risk, and I'm very optimistic that things will be different this time around, and I'll do my best to make a lot of money so I can give it back."

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Lynn Bronikowski is a freelance writer in Denver.

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