New Michigan Mortgage Broker Enters Struggling Market

A new mortgage broker is about to enter the Ann Arbor housing market, despite the slowdown in residential housing construction and sales.

Ann Arbor will serve as the regional operations center for International Mortgage Solutions, said Thomas Unger, CEO.

The mortgage startup enters the market as new mortgages written in the county fell 23 percent since 2005. According to the Register of Deeds, 21,328 mortgages were written in 2006, down from 27,843 in 2005.

“We believe that where there is a shake-up, there is an opportunity to find better talent,” said Unger. “People will still need mortgages.”

International Mortgage Solutions, a subsidiary of Western Michigan-based Public Financial Services LLC, expects to open by early May.

The office will serve as the headquarters for up to seven loan officers, two processing staff members and COO Daniel B. Peluso.

The firm has leased 2,200 square feet in south Ann Arbor’s Concord Office Center in a deal brokered by Bart Wise of Swisher Commercial.

International Mortgage Solutions also took an additional 500-square-foot office in the building. That space has been sublet to Stewart Title Agency of Southfield.

Huron Valley Financial president Eric Bradley said that the Ann Arbor area has at least 40 Michigan mortgage companies, but that the majority of names have changed over the last decade.

Because of a tight-knit community in Ann Arbor it is more difficult to get a foothold in the home mortgage loan market here than elsewhere.

“Realtors aren’t familiar with the name, the community isn’t familiar with the name… That’s one of the struggles I see for companies coming into this market,” he said. “Ann Arbor is a big little town and it takes more than coming in and putting up a sign to be successful in this market.”

Another challenge for both established and new mortgage brokers is that, with the struggling sub-prime market, underwriting guidelines change on a daily basis.

Unger said his mortgage brokers chose the Ann Arbor housing market because of its median home values and because of the potential for greater volume of business, compared with other Michigan communities.

“If you look at the Michigan housing market, we saw Ann Arbor as having more commercial activity,” he said.

One of the niches IMS will be focusing on is helping foreign nationals get mortgages. “We want to tailor to the international market, helping foreign nationals through the myriad of requirements,” said Unger.

Another niche the Michigan mortgage company plans to tap is Muslim citizens.

“Islamic law doesn’t allow direct mortgages, but there are solutions for that through irrevocable trusts,” Unger said. “We want to open up opportunities for all kinds of individuals.”

The initial licensing for IMS is for Michigan, but the company expects to pursue locations in other states.

“We are planning to open in additional states. We have just come back from an exploratory visit to Florida,” Unger said.

SOURCE: Ann Arbor Business Review