Broker Grows Despite Meltdown

Leif Thomsen isn’t hauling in the multi-million dollar paydays he was earning during the industry boom of a few years ago.

But he also isn’t cutting back, slowing down or retrenching.

Thomsen, who made national news by earning $10 million in 2003 as the founder and operator of Mortgage Master in Walpole, Mass., is still making money, brokering loans and hiring employees.

“Obviously, it’s nothing like 2003,” Thomsen told MortgageDaily.com. “But if you work hard and keep your overhead low you can still make a buck or two. We’re actually growing pretty rapidly right now.”

Thomsen won’t say how much he made last year or expects to make this year. “We’re definitely down from ’02 and ’03. But this is still a great business.”

His company’s loan volume at his company will come in just under $3 billion this year, up from $2.4 billion last year. Thomsen projects 2008 volume of $4.5 billion to $5 billion — well above the $3.4 billion he closed in his heyday of 2003.

Mortgage Master has added 50 sales people in the last year to its 17 offices. He knows not everyone in the business is in his situation. Thomsen avoided the subprime market, where most of the industry’s problems are focused.

The growth contrasts the contraction happening in the mortgage broker sector — which is suffering from a decline in available wholesale programs.

A forecast by Wholesale Access Mortgage Research & Consulting Inc. has the number of mortgage brokers, currently around 53,000, declining by 25,000 within two years.

“I know that many of my competitors are dying or losing money, but we have kept cost relatively low and can still find a little left on the bottom line,” he said. “We’ll see 2 million foreclosures in the next 18 months, but this is a business that is going to be around. The housing industry … will not disappear overnight.”

Thomsen said one of the biggest problems associated with subprime mortgages and the industry downturn is that many brokerages should never have been in the business to start with because they didn’t understand the industry and were only interested in making and brokering loans.

“You had 100 percent loan-to-value with bad credit and no documentation loans and people thinking that would never go bad,” he said, adding that “even Wall Street didn’t understand the risk apparently in the products they came out with.” But Thomsen is optimistic about 2008, or his own business and the industry at large. “People will always need homes to live in,” he said. “Fortunately for me, most of them cannot pay cash. Rates will go down, people who have been put in mortgages will come back and refinance. That is about to happen. “Rates will be coming down in the near future. I think ’08 will be a fantastic year for refinancing.”

Related:

$10 Million Broker is MortgageDaily.com Icon of 2003
Mortgage broker Leif Thomsen is in for a big pay cut in 2004.