RAC Acquires Laguna Hills Mortgage Firm

A fast-growing Dallas finance company that agreed two weeks ago to buy a Tustin thrift and loan said Tuesday it has acquired a Laguna Hills mortgage banker in a stock swap.

RAC Financial Group Inc. said it bought Capital Direct Funding Group Inc. and will operate the company as a separate subsidiary. RAC wouldn’t disclose the value of the stock.

Capital Direct, which has about 200 employees in six Laguna Hills offices, offers second trust deeds, called junior mortgages in other states, to homeowners who want to consolidate their consumer debts. But its innovative marketing through direct mail advertising was a major attraction for RAC, which operates nationwide as FirstPlus Financial.

“Everyone in California has seen our mailings every 40 to 50 days,” said Bill Joiner, who founded Capital Direct three years ago to offer debt consolidation loans. “We’re a mortgage banker, but what’s unusual about us is that we own the mail facilities that produce our advertising. We work 24 hours a day on production of mail.”

From the mailings, he said, the company fields about 3,000 calls a day, a number he expects to increase by a third as the company’s mailings rise from 155,000 pieces a day this month to 205,000 a day next month.

The company’s aggressive marketing, primarily in six Western states, will be used to sell RAC’s FirstPlus loans nationwide as well, Joiner said. FirstPlus also is advertised on radio and television with football star Dan Marino as spokesman.

The direct mail also will market loans sold by the Tustin institution that RAC is acquiring, Citizens Thrift & Loan. That acquisition, which involves a stock swap worth $25 million to $30 million, is expected to be completed later this year.

Capital Direct earned $6.6 million last year and, Joiner said, is 30% ahead of that pace this year.