Randy Luke has worked as a mortgage broker in Thurston County, Washington, for the past 25 years, giving him a view of an industry that has seen its share of highs and lows.
The lowest of the lows came during the Great Recession as business dried up and mortgage brokers fell under greater scrutiny and regulation.
Luke, who used to work for Horizon Mortgage on Martin Way in Olympia, said its 11 offices closed.
But he still enjoyed the work, so he opened South Sound Home Loans LLC from his home in Lacey, although business has picked up to the point that he may hire and open another office, Luke said.
Luke sat down with The Olympian to answer five questions about what it means to be an independent mortgage broker after the financial crisis.
Q: How has the mortgage broker business changed?
A: When I came to Olympia in 1991, it was home to 25 independent mortgage brokers.
But after the big recession and mortgage meltdown — and going from no regulation to over-regulation — the number of mortgage brokers fell to less than half a dozen.
All mortgage lenders can no longer retain any of the surplus rebate by charging a higher mortgage interest rate.
You have to refund that back to the customer, which makes sense, but that previously was 30 to 35 percent of all lenders’ compensation.
Business also had slowed.
Two out of three loans used to be a mortgage refinancing, but at the height of the recession, mortgage refinancing fell to 15 percent.
Many said this isn’t going to work and got out of the business. But there are those of us who stayed because houses haven’t gone away.
Q: What do you like about the mortgage business?
A: I like dealing with numbers.
The numbers and the calculations and figuring out all the requirements for a loan: debt to income, loan to value. I always enjoyed that. The biggest thing is helping people get into a house. It’s a great business and it’s not physically demanding.
Q: Why did you decide to go into business for yourself?
A: It can be a one-man operation.
Everything is electronic and digital.
There’s more paperwork now — the average loan package has 35 to 38 forms to sign — but it’s all done electronically. I don’t need to hire, but at the same time I’m considering opening a new office and hiring three or four people.
Q: Why should one use a mortgage broker?
A: Not everybody has a 720 credit score or has two years on the job. There’s still some flexibility if you’ve had some credit challenges, or if you don’t fit the mold of most lenders.
Q: Are the bad eggs of the mortgage business gone?
A: They’re all gone. It’s pretty regulated now, so we’re under a microscope.
Half the people who had been it before 2008 have gotten out.
It’s tougher to make a living, but I still love it.
