How did you come to establish Freedom Financial Services and Mortgage Solutions?
I had been a partner in another mortgage banking firm here in Colorado and decided to leave and try my luck on my own. Freedom Financial Services was started as a mortgage broker in 1997 to deal with consumer direct mortgages. In 2001, I opened Mortgage Solutions to try to capture some of the wholesale market share, basically buying loans from other brokers. In 2004, Freedom Financial Services and Mortgage Solutions merged. We still do business in Colorado Springs as Freedom Financial Services because of all the name recognition we have. Outside the state we are Mortgage Solutions, and our wholesale division operates as Mortgage Solutions. We have some small retail branches that operate as Mortgage Solutions in Colorado.
What drew you to this line of work?
I retired from the United States Air Force in 1992 and actually wanted to be a stock broker. I hated it. I lasted three months and I kept looking. After a short career in the insurance industry, I was introduced to the mortgage industry. What appeals to me about the mortgage industry is that everyone wins. The homebuyer gets the dream home, and we provide a necessary service. The home buying process is an exciting time for most people and being part of it is very rewarding. I worked for Norwest Mortgage, who had a great training program, then a series of mortgage brokers before I was ready to try my luck with my own company.
What is the most challenging part of the mortgage industry today?
Dealing with government regulation and the uncertainty of the market tie for first place. The government had a huge role in setting the stage for what has become known as the “Mortgage Meltdown” by requiring different entities to make loans that should not have been made. Now they are really overreacting, making it so tough to lend money that many good borrowers are struggling to find loans. The cost of compliance in our industry has risen significantly, making the process more expensive for both the company and the end user — the home buyer. The uncertainty in the market is based both on rates and product. With the government controlling the majority of the loans being made (FHA, VA, Fannie Mae and Freddie Mac), homebuyers must fit into a very small box to qualify. If the rates were to go up by a point, as many experts say they must, even less people will qualify. The ultimate fate of Fannie Mae and Freddie Mac has yet to be determined, but any significant departure from our current norm could cause issues.
Have you seen your market share shift in Colorado Springs in the past few years?
Absolutely. Our market share has increased in Colorado Springs rather significantly over the past 4 years for a few reasons. Colorado started regulating our industry in 2008. Prior to the regulation, the cost of admittance to this industry was minimal. Now there are tests to be taken, bonds and insurance to be purchased and requirements to be met. It was a good move for the people of Colorado. Since then, thousands of people have left the industry either because they could not meet the requirements or because it was too expensive. Some have moved to banks, where there exists an exemption from compliance. Additionally, FHA changed their capital requirements for mortgage bankers, driving some of the smaller players out of the business or forced them to become affiliated with larger mortgage banking firms. We have benefitted from this in that we have been able to attract several of our old broker partners to join us.
What’s ahead for your company?
We are currently licensed in 15 states and have a few more pending. We moved into the California wholesale market in January, and we fully expect to see our production double in the next 12 months. We are growing in Denver. We also recently opened an office in Durango, our Pueblo operations are strong, and we are growing steadily in Grand Junction. We are in the right place at the right time with the right product. It is truly a business owners dream, and it all started here in Colorado Springs. What an amazing place we live in.