Startup supplies staff to feed mortgage boom - 7/23/03
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Wednesday, July 23, 2003

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Douglas Trojanowski

Mortgage Group Staffing LLC trainer Alice Alvey explains the ins and outs of the mortgage business July 16 at a training workshop in Bingham Farms.

Local spotlight

Startup supplies staff to feed mortgage boom

Mortgage Group Staffing helps with jump in loan demand

Image
Douglas Trojanowski

Toiya Neloms of Detroit listens during one of Mortgage Group Staffing LLC's classes.

Mortgage Group Staffing

Bingham Farms

Employees: 20 trained and working in the mortgage industry; 20 more have completed first mortgage class

Specialty: Providing and training mortgage processing staff for banks and mortgage companies.

Call: (248) 646-6322

Mortgage facts:

Number of mortgage loan originations in Michigan:

2001: 644,763; average loan size $116,585, representing about $75 billion total

2000: 360,015; average loan size $94,548, about $34 billion.

* National mortgage originations for 2003 will total $3.3 trillion nationally, up from $2.5 trillion in 2002.

Sources: Mortgage Bankers Association of America and LenderCareers.com.

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BINGHAM FARMS -- Interest rates haven't been this low since Eisenhower was in office. Banks don't have enough people to keep up with the new loan demands. Unemployment in June in Michigan was 7.2 percent -- its highest since 1993.

Two public relations professionals and a lawyer see a business opportunity in those facts and have formed Mortgage Group Staffing LLC.

"Our intention is to become known as the primary provider of labor to the mortgage industry," said Paul Kesman, one of three owners of Mortgage Group Staffing LLC, formed early this year and operating since March.

Kesman is a partner in the Bingham Farms public relations firm Identity Marketing and Public Relations. Mark Winter is his partner at the firm and Winter's wife, Carmen, is now his partner at Mortgage Staffing. Joining them is Kathleen Trott, an attorney and the wife of Identity's attorney, David Trott.

Some of Identity's banking clients complained to David Trott about their staffing woes in the midst of increasing loan demand. The temporary workers they were getting didn't have what the banks needed for people who could process and underwrite loans, Kesman said.

"Big national staffing firms have their place, but they try to be everything to everybody," Kesman said.

Kelly Services President Carl Camden said financial services, including mortgage service, is one of the fastest growing areas for the temporary staffing company. Kelly does send employees to Mortgage University and other classes, he said, but there's room for others to get in on the game.

"There is a huge demand for mortgage professionals," Camden said.

Mortgage Group has 20 employees working in mortgage firms. Kesman expects the company to have 35 by year's end, which would provide at least a break-even income. Mortgage Group is a niche player compared to Kelly Services, which has 700,000 employees worldwide.

Staffing firms make money by taking a cut of wage fees that are paid by customers. A startup should have a 50 percent markup (the company charges $15 and gives $10 to the employee, for example), said Sam Sacco, a partner at R.A. Cohen Consulting Inc. in Wilmington, N.C., who has years of experience in the staffing industry. The markup has to cover payroll taxes, insurance and the cost of doing business. Larger companies can have smaller markups because they have more people in the field. Now is a good time to be in the mortgage part of staffing, he said.

"It's been going gangbusters. Banks can't keep up with it," Sacco said.

Mortgage companies will always have a demand for processors and underwriters, but Mortgage Group should prepare to diversify into other financial staffing areas when interest rates go back up, Sacco said.

Kesman said Mortgage Group plans to service other areas of real estate finance, such as title and appraisal companies and law firms.

"Our biggest challenge is finding people," Kesman said.

Mortgage processing doesn't require a college degree, can lead to higher positions at banks, and they can earn between $15 and $17 an hour through Mortgage Group, Kesman said.

An initial class, held once a month, is three hours long and free. The class teaches a basic understanding that allows employees to get their feet in the doors of banks and possibly do more advanced loan processing and underwriting. Loan processors handle loan applications, validating information on them and making sure underwriters have all the information they need to assess an application.

Gary Anglebrandt is a Metro Detroit free-lance writer


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