Contract Exchange Corporation was founded in April of 1981. At the time, interest rates were near their all-time highs as the Federal Reserve “wrung” inflation out of the economy. With 30 year mortgage rates around 17%, many Sellers turned to that age old instrument, the Land Installment Contract as a means to sell their properties. Able to offer potential buyers 9% (a very good rate at the time), Contracts facilitated the continued function of the real estate market. This system relied in part upon investors who would purchase these contracts, often at a discount, so that the Seller could pay off their mortgage and move on from the property. It was at the age of 28, first child on the way, which Anthony E. Schubert struck out on his own to purchase, resell and service these contracts for a growing pool of private investors.
Since then, the business has grown, many investors staying with Tony the entire way. First Tony Jr. joined the firm, acting as realtor in the large and favorable market of Polk County. This precipitated the development of purchasing not only contracts but also real property itself. The unfolding foreclosure crisis in 2007-2009 provided ample opportunity and the tightened credit market meant that money was scarce, even at record low interest rates. Properties are then sold on Contract to generate the investments that were desired by the clients of Contract Exchange. This has proved successful even has the real estate market stabilized over subsequent years.
The backlash against the reckless lending of the 00s, has strangely enough roped in Contracts, even though they were in no way part of the problem. This has led to a palpable change in business environment. Tony’s other son Christopher joined the firm part way through 2013, the stated purpose being to help navigate the changing regulatory and business environment, and chart a path forward for the company, now aged over 3 decades.
Contract Exchange Corporation is one that is used to adaptation. The current climate presents the stiffest challenge yet to our organization’s ability to adapt. However, we believe that expanding access to housing and credit to underserved populations remains critical to the long term health of our Iowan communities. Contracts offer a better model for the subprime space than traditional mortgages and we intend to continue originating and servicing these instruments with full compliance of the law.