Mortgage Brokering Isnt For Everyone
GRAND RAPIDS — As attorneys with backgrounds in finance and real estate, Lawrence Duthler and Thomas Cronkright II were used to wearing several hats when they started their mortgage brokerage company, Apex Financial, in 2003.
But after two years and the addition of their current business, Sun Title, the business partners realized that being mortgage brokers was one hat too many.
With Duthler’s background as a CPA and Cronkright’s background in finance, it had seemed like a good fit, but Duthler said the intricacies of staying on top of 50 different lenders’ programs and staying competitive with banks was a challenge they decided not to face in light of adding the new title company and also Duthler’s position as “of counsel” with the law firm Barnes & Thornburg.
“It was nearly impossible to keep your thumb on it all,” Duthler said of the up to 1,500 lender programs, which are constantly changing. “You’re trying to find the best program for your client and it was difficult to do. It was frustrating.”
After selling the mortgage brokerage company in 2005, the pair agreed that their experience as mortgage brokers prepared them for operating Sun Title, where Duthler is president and Cronkright is CEO, but also showed them they preferred not to provide all real estate services to their customers.
Audrey Acquisti, a member of the Michigan Mortgage Brokers Association, said she has seen other people like Duthler and Cronkright attempt to branch out into mortgage brokering from the real estate industry or other related industries. Acquisti leads training classes for brokers and real estate agents and is a consultant for mortgage brokers, looking at their policies and procedures as well as auditing for their lenders. She co-owns MSource Financial Services and MSource Training and Consulting in Clarkston with her husband, David.
“We are seeing people who are looking to broaden their horizons,” she said. “They’re staying with the financial real estate industry but just branching out a little bit. The trend is more so to see real estate people opening up a mortgage company, and we’re starting to see the reverse, as well.”
Acquisti said when dealing with these multiple roles, education is the key to being successful.
“There has to be proper educational training for that,” she said of becoming a mortgage broker.
Another trend has been more astute customers, Acquisti said. Clients are doing more research and asking the right questions when looking for a mortgage.
Disclosing the nature of serving multiple roles and letting the customer know that it is not mandatory to use the agent in those roles is essential, Acquisti said.
“These are the guidelines; these are the rules,” she said.
After nearly 29 years in the business, Pava Leyrer, president and owner of Heritage National Mortgage in Grandville and president-elect of the Michigan Mortgage Brokers Association, said she has seen many people with dual licenses, but they have become more prevalent in recent years, especially with recent changes in technology and advertising means such as the Internet.
“I think it’s become another avenue for businesses to look into,” she said.
Leyrer said she has had difficulties when real estate agents have told clients that they must have a mortgage through them. The issue is delicate within the industry, Leyrer said, with many different opinions on the ethical question of serving multiple roles in a real estate transaction.
“It’s a very interesting and very highly debated topic,” she said.
Leyrer said she personally wonders if it is possible for one person to navigate all the complexities of the different areas of the industry.
“That’s a time balance that maybe someone can do, but I see it as a potentially huge challenge, and then you might slide in certain areas that maybe you shouldn’t,” she said. “I think a lot of people think it’s a way to make an extra dollar.”
To help alleviate any ethical issues, Leyrer suggests that clients get two or three quotes before deciding on a mortgage.