Mortgage Brokering, an introduction

November 14, 2008 – 7:16 pm

BY RICHARD RUSSELL

Richard Russell, president of Richland Equity Resources Corp., came To real estate by a series of corporate events that typified the late ’80s. A top executive for Burlington Industries in 1980, Russell, after returning to New York from Chicago , moved into a five-story walk-up in Hell’s Kitchen. He searched for a bank to finance his home, but was unable to find one that handled small apartment buildings like his. With his entrepreneurial spirit and previous experience in handling real estate transactions, Russell recognized a need and decided to fill it. He returned to school and received a certificate in Real Estate Finance from New York University to supplement his MBA and joined Mortgage One Corporation and later Lending Concepts to learn and master the business.

Russell may have to work harder as a sole practitioner, but he Believes it’s worth it. Mr. Russell has built his business on his reputation. Russell is proud of the clean, legitimate shop he runs. People know that if you go the Russell, he’ll get the deal done. If he can’t, he lets people know. He is not in it for the quick buck, but for the long haul.

Richard will write in this column once a week and will give us different aspect and changes from the mortgage field. This week the article will touch a summary about the mortgage brokerage.

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Mortgage brokering is an industry of small entrepreneurs who are Helping friends and family live the American dream of owning real estate. For decades, brokers have filled the voids left by banks by bringing the money to the people. In the past, if a person wanted to buy a home, they went to a bank during the banker’s hours and sat in a lobby hoping to see the vice president of lending. If they weren’t there, they were sent away and told to come back after making an appointment, or they were told to come back after they found a house so the bank could work with real figures. The potential buyer then would spend months looking at homes, fall in love with a home, make an offer, get it accepted and then proceed to the bank with much excitement. The banker would then tell that person they couldn’t afford their home due to their credit history, tax returns or lack of down payment.

Brokers became the advocate for these buyers by opening up the Closed society o banking to the public. Brokers met with the buyers after banker’s hours. They talked in common vernacular, explaining how to work the system to fit their situation. Brokers had the brilliant idea to figure out how much buyers could afford to pay before they would go out looking for a home. Brokers decided to save everyone the time and embarrassment and review credit reports, income and assets before a real estate agent or builder wasted any time with a potential customer. This proactive, deal-making attitude endeared local brokers to their local real estate agent/builder partners. Brokers brought a value to all; the customer had an advocate putting them into the home of their dreams in a way a banker couldn’t, and in the end, the banker/investor got an asset for their books with no hassle.

Before our memory fades, we need to see how the scrappy kid from the Bronx , Angelo the once President of Countrywide, assembled other scrappy, hungry kids from state colleges and built a great company doing all the things that those blessed with better educations and family bank accounts didn’t want to do. As the banks now became filled with confidence, the solid brokers remaining, like my company, The Richardland Group need to remember Angelo’s lessons and find those areas where banks arrogance prevents them from succeeding and fill that need.

All the pending and final legislation pertaining to this industry Has served a good purpose of weeding out those bankers and brokers who never understood their purpose in this business to begin with. We did. We are here to stay and actively involved in the local and governmental pursuit of this endeavor.