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Mortgage Broker Going Public

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Mortgage Broker Going PublicFreedom registers with SEC

March 27, 2007


A privately-held Indiana-based mortgage holding company plans to build a nationwide mortgage broker infrastructure with proceeds from its first stock offering.

Freedom Financial Holdings Inc., a umbrella company that includes Freedom Financial Mortgage Corp., has filed a registration statement with the Securities and Exchange Commission for the public sale of a minimum of 375,000 common shares and a maximum of 625,000 common shares at $2 a share for an anticipated $750,000 to $1,250,000.

“We’re just about ready to submit our answers to the comments and questions from the SEC to that first filing,” Brian Kistler, president and CEO of the Fort Wayne, Ind.-based company, told

Freedom, with offices in Fort Wayne; Tampa, Fla; and Woodstock, Georgia, outside Atlanta, currently lends in those three states plus Tennessee and Missouri, Kistler said. It has been approved to lend in Nevada and is currently looking for a site there and also in Ohio and Michigan, where it has license applications pending.

Last December the company moved its headquarters from a 2,200-square-foot location into 8,000 square feet of space in a 16,000-square-foot building it had purchased. At that time Kistler said the company planned on adding 35 to 40 new loan officers and support staff during the next two years, doubling its current size.

The stock sale proceeds, according to the SEC filing, would be used to expand the existing operations of the mortgage subsidiary, invest in technology to improve its infrastructure, open additional offices and hire additional staff.

Its expansion also could involve “increasing our marketing activities and developing enhanced information technology systems to serve a broader market,” according to the SEC filing.

While the company anticipates expanding its mortgage brokerage operations throughout the United States, the SEC filing stated that the company initially will concentrate those operations “throughout the areas in which we have experience, specifically Indiana, Georgia and Florida.”

“We broker everything that we do – A, Alt-A, subprime,” Kistler told

Those products include 15- and 30-year fixed-rate mortgages, five- and seven-year balloons, seven different ARM products, stated-income and interest-only programs, and HELOCs.

Most, if not all, require down payments.

“One-hundred percent [LTV] seems to be going to the wayside,” said Kistler, who would not say what minimum down payments or minimum FICO scores are for the loans the company originates.

“It is odd timing” for a mortgage company to go the public markets at this time, Stephen F. Ornstein, a partner at Thacher Proffitt & Wood in New York, told “But they’ve obviously looked at their products and they must have some confidence in them.

“You’re going to see the stronger mortgage companies come out looking very well, mostly those with a variety of products,” he explained. “And you’re going to have significant continued demand for subprime lending, with some adjustments in the short term as far as the underwriting of those mortgages.”

Lenders that continue to offer subprime mortgages, but with changed underwriting, he said, “aren’t throwing the baby out with the bath water.”


Jerry DeMuth is an award winning journalist who has been reporting for four decades.

e-mail Jerry at

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