As a late entry into the loan servicing game, Midland is now leading the race and giving the older, more established firms a run for their money.

The successful loan servicing companies are easy to spot: they are some of the largest global financial institutions in the world with years of experience. Right? Well, not necessarily. The picture is getting fuzzier, and the once well-defined profile is not so CUt and dry these days. In fact, one of the companies that's leading the loan servicing business in the '90s has chosen to break the mold instead of fit it.

In 1991, Midland Loan Services L.P. launched itself into the real estate world by building a solid team of people, ousted from real estate during its troubled times, and positioning its business squarely on the doorstep of the newly created Resolution Trust Corp. (RTC). Starting with a handful of loan servicing assignments from the RTC, Midland began to surge ahead.

"I think we really were both lucky and good in the sense that we probably could not have put the company together, in terms of human resources, two years earlier because the quality of people that we had at the time weren't available," says Alan L. Atterbury, president and CEO, "and we probably couldn't have put that scale of organization together two years later because they also wouldn't have been available."

Almost immediately after beginning its loan servicing for the RTC, Midland began to look further and think about what life would be like after the RTC.

"We really realized immediately that the RTC was not going to be around forever," says Atterbury. "It ended up wrapping up a lot earlier than we thought it would but, because we knew that it wasn't going to be around, we immediately set out to, at the same time we began servicing loans for them, focus on how to transition on into private sector involvement and loan servicing."

Midland decided that the way to do that was to become a qualified servicer for the commercial mortgage-backed securities (CMBS) market, which was just getting started at that time.

"We were very fortunate to be approved by the rating agencies to service those kinds of loans in a very short time frame after we began servicing our first loans for the RTC -- about six months between the time we began to service loans for the RTC and we were approved for CMBS deals," says Atterbury. "That was really, I believe, as a result of our doing a very good job for the RTC and being very responsive to the particular needs of the CMBS market."

"If you stop for a second and think about a company that had just opened its doors to its first loans, seven months later being approved by all of the major rating agencies to service for commercial mortgage-backed securities that, in and of itself I think, says a lot about the quality of people and the commitment of our people. which has always been a real strength of ours," says Clarence A. Krantz, executive vice president.

The tact that it was not the typical institutional group gave Midland a strong advantage over its competition.

"What really makes us unique in the marketplace is that virtually all our competitors are institutional," says Stacey Berger, executive vice president. "Generally, they have emerged into providing third-party services as an adjunct to what was originally an internal backroom function. We started out and have really only provided third-party services. We started out without any kind of name recognition. The only way that we could compete was to provide the highest levels of customer satisfaction and performance. And so we just bring a different attitude toward the servicing business than all of our competitors. Again, our performance has been proven over and over, hut we set out with the goal of leading the industry."

As one of the largest servicers of commercial mortgages, Midland has serviced more than 33,000 commercial loans, valued at more than $22 billion. Its current servicing portfolio stands at 12,000 loans with about $13 billion in principal balances.

Besides loan servicing, the company also specializes in asset management, special servicing and advisory services for both institutional and private real estate investors. Midland's asset management team has resolved in excess of $4.8 billion in real estate assets for its clients.

In the CMBS market, Midland is the leading master servicer, according to the newsletter Commercial Mortgage Alert. In the first half of 1996, out of about $12.22 billion in total CMBS with master servicers, Midland has approximately $2.45 billion in total CMBS loan servicing assignments.

"One of the interesting things, at least on the servicing side with the CMBS securities, if you look at some of Midland's competitors -- GE Capital, Banc One, Bankers Trust -- these are some of the largest global financial institutions in the world; and Midland in four years has surpassed them in their servicing volume," says Berger. "That might be testament enough on the servicing end."

And the CMBS market is such that there's still room for growth, says Berger. Of the almost $ 1 trillion in outstanding commercial mortgages, only $120 billion worth has been securitized thus far.

As a leader in the industry, Midland thinks it has found the right combination for success: not only its people, but its technology. "Real estate expertise -- that's hard to quantify. Everybody thinks they have the best people. We think we have the best people, but not only do we think we have the best people, but we think we have the best technology," says Berger. "And it's really the combination in real estate of expertise and technology that's given us a major competitive advantage."

"We view the technology that we've developed as being the kind of engine that can really drive transactions more efficiently," he says. "And again, its been recognized a number of times. If you look at the major transactions that have occured last year and this year, we've been the servicer on a number of them."

To expand even further, Midland began Midland Commercial Funding (MCF) as the loan origination arm of the company. Since 1994, MCF has originated and securitized more than $700 million in commercial real estate loans, originating loans ranging from $750,000 to $15 million nationwide in all property types. Previously, Midland sold the loans it originated to Prudential Securities, which securitized them. Last year, the Midland/Prudential team had two conduit offerings, totaling $327.9 million of securities.

This year Midland has begun its own shelf registration allowing it to issue CMBS loans itself. Now Midland will be able to keep a larger piece of the profits by securitizing the loans itself under its new shelf entity, Midland Realty Acceptance Corp. Midland Realty Acceptance recently completed $325 million in securitizations.

Midland has teamed up with Smith Barney for the first time to pool 143 loans for a $380 million CMBS deal. Approximately 63% of the loans have been originated by Midland.

"We come at loan origination with a long-term commitment," says Krantz. "We intend to stay with our deals from inception through final liquidation."

"So our goal is for people to recognize that a Midland securitization carries with it a commitment from the company to stay with the transaction both from a servicing perspective and a financial stake in the transaction for the life of the deal." Krantz says.

In loan origination, the important thing to the borrowers and those behind the borrowers is certainty of execution, says Berger. "Because you can get almost the same loans in a variety of different places, it's how much it costs you and how much brain damage it takes you to get there."

In the five or so years it's been around, Midland has built its reputation from the ground up. While bigger firms had their parent companies to lean on, Midland has found success on its own.

"What we've proven as a company is the ability to find opportunities that we can realize on, and we've carved out a series of niches for ourselves in businesses that are very competitive," says Berger, "and I think we have a very good understanding of what opportunities make sense for us and how to focus our attention and resources on those businesses to be a market leader."

"Given the fact that you're in a cyclical industry," says Krantz, "our focus is to remain broad enough in our perspective and broad enough in our expertise and capabilities that we can capitalize on anything that does come up."

HeadquartersShawnee Mission, Kan. Primary operating facilityKansas City, Mo. Marketing officeWashington, D.C.

* The company was founded in 1991.

* Midland has 350 employees.

* To date, the company has originated and securitized more than $700 million in commercial and multifamily mortgages.

* Midland has serviced more than 33,000 loans, valued at more than $22 billion.

* The asset management group has resolved more than $4.8 billion in real estate assets.