Any advantage to becoming a Mortgage Originator?

Question

After referring numerous people to my favorite mortgage broker I've recently tossed around the idea of becoming a broker myself. Ideally, it would be a semi part-time thing for me, mostly originating loans for other investors but I am sure that some of my local contacts would also bring me some business as well.

There are a few things that I am unclear on that hopefully some of you brokers out there could help me with.

• Would I be able to broker loans for myself, thereby saving myself some closing costs and be able to have a bit more control?
• Are there any other benefits/disadvantages to being both a broker and an investor that I may not be considering?
• How feasible is it to make this a part-time gig rather than a full-time job?
• Once licensed, how would I make contact with underwriters if I am just working as a small operation for myself?

Thanks ahead of time for any help and advice!

Chris Mason · Answer

@Rob Lehmann,

1) No, I can't originate my own personal mortgages.

2) Probably not.

3) You're not going to have the necessary product knowledge putting 5 hours per week into it to help any scenario more complex than 20% down, seasoned funds, owner occupant, W2, good credit. In your head you just went "oh that's like 80% of homebuyers!" -- nah, probably more like 20%.

4) You need an entire infrastructure. The flat overhead costs (compliance, software, compliance, processing, compliance, office space, compliance, compliance, compliance, and did I mention compliance?) just to keep the door open for business mean that if you try to do a one-man shop, your interest rate pricing will be utter garbage OR you will be losing money on each deal you do. The smallest independent mortgage brokerage I've encountered with competitive interest rate pricing had 14 employees.

Rob Lehmann · Answer

Chris Mason

Thanks for the information, you've confirmed much of what I had suspected but it is good to hear it straight from a professional. Much appreciated!