Mortgage broker Leif Thomsen is in for a big pay cut in 2004.
His salary will “drop by 60 or maybe even 70 percent,” Thomsen said in an interview.
But don’t feel too sorry for him. After making more than $20 million over the last two years, he can afford it.
Thomsen, 43, the owner of Massachusetts-based Mortgage Master Inc., is MortgageDaily.com’s Mortgage Icon of the Year, not only for his hefty earnings — but also because of his success in the business.
“This is a fantastic business for anybody out there who is a go-getter,” he said. “It gets in their blood. There’s no other business you can come in without an education and make good money.
“For me it’s just luck, the right place at the right time.”
A high school dropout and native of Denmark, Thomsen started his firm in 1988. He does no advertising, relying instead on “word of mouth.”
Thomsen said the firm is the largest independently owned mortgage company in the country, and operates satellite offices in Connecticut, Illinois and Florida.
He made headlines for his $10 million in earnings in 2002, and said he made “not much more than that” last year.
“It is a lot of money,” he said. “So much it’s ridiculous.”
Thomsen talks about his money but he does not boast about it. Nor does he whine about earning significantly less this year.
In fact, he feels bad because a downturn in refinancing — the bulk of his business — means he will have to let people go.
“We’ve already had to let people go,” Thomsen said.
Employment at his firm is likely to drop this year from about 225 to 140 or so.
| “There is a very clear correlation with interest rates going down and us growing,” he said. “This is a very, very interest rate driven business. When rates go up, people don’t refinance as much. We all have to compete for that business and there is only so much of that to go around.”
Thomsen estimates his company did about $3.4 billion of business last year. That will drop to about $1.5 billion this year. The mortgage business is “an up and down roller coaster that I’ve ridden a few times.” He recalls the early 90s as being difficult for business, but that 1993 turned out to be an “unbelievable year.” “I remember standing at our Christmas Party, thinking we’d never have this kind of market again,” he said. “And 1994 was a crummy, crummy year. We had to lay people off. They were devastated.” By 1998 business was back up, “four times what it was in ’93,” he said. “And once again I remember standing there thinking there is no way this will ever happen again.” |
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But of course, it did. And now the cycle is heading back down.
“It’s a very cyclical business, that’s just the way it works.”
Despite the volatility Thomsen said there is plenty of money to be made in the mortgage business by people with sales experience.
“We had a young girl come in here in March of ’02 with no experience,” he said. “She made $750,000 the first year in the business. I don’t know of any business where you can do that.
“Proven people whose good sales skills from industries who max out at $100,000 to $150,000 can double, triple or quadruple that,” Thomsen said.
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Industry Icons
What a year for the mortgage industry. 2003 will be remembered as a year of record production and low interest rates, accounting scandals, and the passage of downpayment legislation. But it was the people of the industry that defined 2003. Here are MortgageDaily.com’s five icons of the industry and what roles they played in this historic year.
