10 Steps to Opening your Own Mortgage Brokerage

As I write this, I have been a mortgage originator for 21 years now and yes it has been a wild ride, but I have to say overall, it has been a blast! In 2021 I finally opened Fresh Home Loan Inc., “Independent Mortgage Brokers that Work for the People” ™.

I started this goal in 2007 but with the mortgage crash, and life, and the market, etc. etc. I never did it.  I became motivated again in 2018 as I was tired of feeling limited by a corporate structure and we weren’t a good fit for each other at the end of the day.  I went Independent in 2019, hanging my license with a good friend who was revamping his brokerage and my life has been amazing since!  I finished my classes for the Broker license in 2007 but I didn’t take the broker test until 2020. That was a chore in itself to even get the test date in 2020. Then on April 9th 2021 Fresh Home Loan Inc. was officially Independent! 

It is really tough opening shop.  I can tell you the worst part about it is one of the last things you have time for is production due to all the other minutia going on.  It can be overwhelming. It is definitely worth it though, so if you are looking to do it check out this video and read this:

Step 1 – Your Business Name

Like I say in the video, I think localism works best. Before you fall in love with the name, check with your state registry to see if it’s available. Then make sure you have a domain name that works.  Check GoDaddy, Google domains, etc. 

Step 2 – Your Business Type

What kind of business are you? S Corp, C Corp, LLC? You can speak to a CPA and an attorney about this.  I have set up my corporations through LegalZoom. 

Step 3 – Your Business bank Account

Open one.

Step 4 – Licensing

I am speaking to California here.  You need a Broker License with the Ca. Department of Real Estate, and you need to be acknowledged as a Broker with the NMLS. THEN you apply for a brokerage with the DRE and then the DRE communicates with the NMLS when you are registered and open. This was painfully slow during the pandemic. Be prepared to be patient (and frustrated!).

Step 5 – Mortgage Call Reports 

These are due quarterly and there is an annual report as well.  Stay on top of your call reports. 

Step 6 – Your Lending Partners 

The way I found out my brokerage was opened was because I had 2 really big wholesale lenders call me on Friday morning asking me to sign up.  I was like “You mean I am FINALLY OPEN??!?!?!” 

Get approved with those guys because they will have you running credit and submitting loans in no time. You should then get signed up with a good 5 wholesale lenders (or more) depending on the size of your company. I can tell you I also had a couple wholesale reps call me to get signed up, so I said “Sure, why not” and they were terrible, and the reps were stalking me all the time, I stopped answering the call fo one from Southern California, next thing you know he has a local area code he is calling me from. I would say, avoid that!

Step 7 – Support 

I mention a couple broker groups in the video.  It’s to be connected to like-minded individuals.  Just make sure you spend more time originating, than posting on social media to these like-minded individuals. 

Step 8 – Credit Reporting and LOS Software

Afterall, once you are open you will need to start taking applications, right? Vet ALL LOS systems carefully and even do it now before you are open. Integration is key. As far as credit reporting goes, it does take some time to get this going. There is an onsite inspection as well. I would go with a company you have used elsewhere and like. 

Step 9 – Compliance 

Getting behind on compliance can be easy to do. You can hire a compliance officer which I do think is a good idea. Otherwise, the NMLS can be very helpful. 

Step 10 – Insurance 

Figure out what protections you need, E&O, general liability etc. 

All these things need to happen simultaneously as you are supposed to originate loans. It can be a bit overwhelming. If you want to explore working for a wholesale brokerage, we are recruiting and geared for that San Francisco Bay Area/ California Jumbo/High Bal Market. Visit https://freshhomeloan.com/hiring-loan-officers/ for more details and Good Luck to you!  You are going to CRUSH IT!

You can reach me at garrick@freshhomeloan.com for questions – Garrick 

Garrick Werdmuller has been originating loans since 2001 and has received awards from industry accolades as National Mortgage Professional Magazine, Bay East Association of Realtors, Top Agent Magazine and Expertise.  He is the author of Home Buying and a Global Pandemic available on Amazon: https://www.amazon.com/Buying-Global-Pandemic-Garrick-Werdmuller-ebook/dp/B097J1CR94

Garrick Werdmuller

garrick@freshhomeloan.com
(510) 626-9100