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Broker Spotlight: Morphing a mortgage fluke into a million-dollar business
BrokerNewswire - July 7, 2006
Ever wondered how successful mortgage brokers got that way, and how they stay in the game regardless of market conditions? In a new biweekly series, we’ll be sharing the stories of seemingly ordinary mortgage brokers doing extraordinary things. We’ll tell you how they built their shops and explain the unique strategies they use to keep them going.

In today’s story, we take a look at how Topdot Mortgage owner David Brown fell into the mortgage industry by accident and has used his client-centric strategy to drive his broker/banker business across the country.

David Brown: Morphing a mortgage fluke into a million-dollar business

David Brown got into the mortgage industry by a fluke.
“I was a lawyer by trade and had been practicing bankruptcy law,” he said. “In between closings 12 years ago, I bumped into a friend of mine from high school who was in the mortgage business but not really happy. I asked if I could help.”

Brown offered his friend a place to do mortgages at his law firm. The firm applied for a mortgage license and secured advertising for new clients but that’s when Brown’s friend changed his mind.

“He decided he was going to go in a different direction,” Brown said. “And now we had this mortgage company we didn’t plan to have.”

Although no one at the firm knew about the mortgage industry, Brown had to traffic the new-client calls that came in and just learned as he went along.

“I asked questions that I learned from being a lawyer and also from general understanding and then referred those clients to those in the mortgage business,” he said. “Over the next couple months, I learned (the business) by networking. The company started to build up goodwill and get a client base. I hired more people to help me and the firm took off from there.”

Brown graduated from the University of Michigan in 1990 with degrees in economics and Spanish. He attended Brooklyn Law School, graduating in 1993, and went into bankruptcy law.

His company, originally named BLS Funding LLC, was founded in 1995 as a residential subprime mortgage brokerage firm. The name was changed to Premium Capital Funding LLC and then finally Topdot Mortgage. The company started off in New York and then in the tri-state area. It grew region by region, first to the West Coast, and then expanded down South and to the Midwest. Today the company, headquartered in Jericho, N.Y., has 16 branch offices and is licensed in 38 states.

For the past three years, Topdot has also been dabbling in lending, Brown said, which was prompted by market share, regulatory changes and market changes. In 2005, the company originated $2.5 billion in residential mortgage loans.

“It’s been an exciting time for us,” he said. “We are 30-35 percent banker, 60-75 percent broker. You can do good for people and take them from a situation where they are in one stage in their life and leave the transaction being satisfied. If you’re client leaves you feeling like they want to refer you to a friend, you’ve done a good job.”

And to get these results, Brown takes customer satisfaction very seriously. Through his customer-centric program, the borrowers are matched with loans specific to their circumstances and needs.

“We make sure the borrower is well informed,” he said. “Quite often a borrower thinks they know what they want but they don’t know because they haven’t been given the options. Our job is to give them the options. That’s something we teach our agents. Every loan is providing an object of benefit to the borrower. The after-transaction has to be beneficial. They have to walk away feeling like they made a good choice.”

Brown and his agents make sure that every transaction is all about the client.

“What's best for the borrower may not be the best of the broker or banker,” he said. “We consider not only the borrowers’ current financial situation but also their future financial situation. A mortgage is more than a credit score and income rate and collateral value. It’s somebody’s overall profile, overall financial objectives. We put them together and really offer options that meet that objective. It’s about lifestyle and what a person wants to achieve.

“We act as an interactive liaison in the mortgage transaction, giving borrowers all they need to make a decision. They are left with the consequences of the action,” he said. “We want them to say when they are making that loan payment, ‘This is what I expected. It fits my needs.’”

Topdot offers residential and commercial mortgage products including fixed-rate and adjustable rate mortgages on primary residences, second/vacation homes and investment properties. Topdot also provides home equity loans and lines of credit, debt consolidations, zero-down payment and 100-percent financing, jumbo loans and interest-only loans.

Brown also admits, with his law background, he feels predisposed to think about predatory lending when making a transaction.

“A mortgage company has to take precautions to make sure they aren’t participating in it,” he said. “It’s their obligation to have internal check lists and guidelines they look at before they do a loan. ‘How many times has this person refinanced in the past 12 months? Is there background verification on appraisals?’ There are non-salesman techniques that make sure the loans are good quality and provide benefits to the borrower.”

As for the future, Brown wants the company to migrate away from the broker world and into the banker world.

“We’ve always lived by the motto that you ‘master something before going into it full force,’” he said. “That’s why we are moving into lending very slowly.”

Brown also wants to be an advocate for dispelling a lot of rumors about the industry.

“There is a lot of misinformation from the consumer perspective,” he said. “We hear about rising rates, predatory lending, housing bubble about to burst, it creates a scare. There are a lot of negative connotations that are blown around. I want to separate fact from fiction. I want the company to dispel the information.

“I want to be involved with breaking up those rumors,” he said, “and bringing out the good in the industry.”