While regulators, banks and homeowners deal with escalating turbulence in financial markets, a Houston mortgage banking firm is calmly pushing ahead with a national expansion plan under a new banner.

First Houston Mortgage Ltd. has spent the past six months scooping up 22 smaller offices in eight states across the country. The latest acquisitions include Premier Mortgage Lending Services in Brighton, Mich. and Mid America Mortgage Consultants and Residential Mortgage Advisors, both based in St. Louis, Mo.

The firm is also in the process of changing brand names to reflect rapid growth outside of Texas. Envoy Mortgage Ltd. was the new company name unveiled at its Galleria-area offices in the Halbouty Center this week.

David Zugheri, who co-founded the firm with Dana Gompers in 1997, is using current market machinations as an opportunity to expand by cherry-picking smaller firms with high-quality mortgage assets.

The latest acquisitions in Michigan and Missouri give newly christened Envoy 475 employees in 35 branch offices across 20 states. During the first quarter of 2008, the firm added $142 million in new loan production and chalked up revenue of $2.3 million.

Other 2008 acquisitions reach across the country, from Concord, Calif.-based Vanguard Financial to San Antonio’s Professional Mortgage Services and Bethesda, Md.-based Global Financial Services. Typical target firms have between three and 20 employees.

Every down market results in mortgage industry consolidation, observes J. Paul Caver, president and general counsel with Infinity Title Co.

He says a company like Envoy can do well if there is a willingness to pare back overhead in all areas, from underwriting to phone systems.

“Once you’re doing more than $20 million a month in loan production you can become a real player,” says Caver. “But you have to have the discipline to consolidate after all these acquisitions.”

He says that the quick growth curve presents another challenge in making sure Envoy has the right mix of cash on hand and can extend the range of its credit system when shipping off bundles of loans to various banks now that the credit market is in crisis mode.

Co-founder Zugheri insists that Envoy is not just growing for growth’s sake, and is working in appropriate changes to back-office operations for handling the influx of new employees.

“We’re going where the talented people are. Just going out hiring anyone to push up your headcount is the kiss of death,” Zugheri says. “There was a time in this business when volume was everything and success was based on how many loans you were doing, but that’s not how we measure success.”

Zugheri says the firm’s identity change has been in the works for a couple of years.

“As we started to expand around the country, we realized the difficulty someone in Oregon might have relating to the First Houston name. We think Envoy is pretty strong,” says Zugheri.

He readily concedes these are topsy-turvy times for anyone in the real estate mortgage business, but says his firm has carefully plotted a low-risk strategy since formation.

“Back after the dissolution of the savings and loans operations (in the 1990s) it gave us a valuable lesson in how free markets behave,” Zugheri recalls. “Why were we so conservative from the beginning? We saw that bad things can happen.”

Even though his company did not dabble in the subprime mortgage market when those no-money-down loans became Wall Street’s hottest product six years ago, Zugheri admits he could have hardly predicted the financial meltdown that ensued.

Says Zugheri, “You could see it coming, when pizza-store managers in California were getting $600,000 homes. But you would have put someone in a strait-jacket if they had said that problems with mortgage industry components would take down Freddie Mac, Bear Stearns and AIG within a few months of each other.”

He notes Houston didn’t have to battle the out-of-control market dynamics of other states such as California and Florida, where home prices skyrocketed and “creative” mortgage products catered to the whims of buyers.

The average median home price in the Houston region is $160,000, still well below the national average of $210,000 — an average that has been trimmed sharply in the past 12 months.

“In Texas, people could still afford a home, and that kept us in the game,” says Zugheri. “I knew that, one day, our day would come and we’d be well-positioned to take care of these kinds of growth opportunities in a correcting market.”