RE/MAX CEO, Chairman and Co-Founder Dave Liniger announced Monday the launch of Motto Mortgage, an innovative mortgage brokerage franchise and the second member of the RE/MAX Holdings, Inc. family of brands.
In a press conference Tuesday Liniger further commented on the development of the franchise as well as rollout plans for expanding the franchise industry-wide.
“The last 10 years has been difficult with the tightening of lending standards, but those have loosened up,” Liniger added in the press conference on the announcement. “This was more a consumer-related issue. Every survey done in our industry has shown the majority of homebuyers would like to do one-stop mortgage shopping for their convenience. We looked at these results and wondered, ‘How can we incorporate this into a real estate office?'”
“We’re doing this in three phases,” Liniger added in the conference call. “The first is to RE/MAX broker/owners who are in 30 different states in the U.S. that accept the federal disclosure document for franchise sales. The second phase is being filed at this time with the states that have separate state requirements. Within 2-4 months, we will take this industry-wide outside the RE/MAX organization to other competitors that we view as professional operations.”
Said newly named Motto Mortgage President Ward Morrison Tuesday: “Each state has net worth requirements, experience requirements and more. We studied each state to understand each requirement, and we’re ready to help each franchisee obtain that mortgagee license so they can operate within their state.”
Motto Mortgage will open mortgage franchises throughout the U.S., increasing competition in the industry and resulting in more choice and a better experience for consumers, the company states. Its loan originators will work with real estate offices so that agents can help homebuyers obtain the mortgage loans that best fit their individual needs.
“RE/MAX disrupted the real estate industry when it was created more than four decades ago. We did it by empowering real estate agents and ultimately giving consumers a better home-buying and -selling experience,” said Liniger at invitation-only gatherings of seasoned RE/MAX franchise owners in Dallas and Orlando. “The RE/MAX model remains unique and continues to thrive because we have the best agents in the business who deliver exceptional service. We are extending our core competency of franchising into the mortgage origination market by introducing Motto Mortgage.”
In an interview with RISMedia, Liniger explained that Motto Mortgage is designed to bring mortgage business back to many local markets. “The big banks were too big to fail and got bailed out by the U.S. government,” he said. “The small mortgage brokers weren’t too big to fail, so they didn’t get any of the bailouts. This consolidated the U.S. into bigger and bigger banks. We’re going to take back some of that business and put it into the hands of the local broker/owners of mortgage and real estate firms who operate in the locations where they’re making the loans.”
Liniger emphasized that Motto Mortgage is focused on the consumer. “We obsess about ways to improve the real estate experience for the consumer,” he said. “We know that independent mortgage brokers’ share of the mortgage origination market dropped significantly following the economic downturn, falling from a 15-year average of 22 percent—with a high of 35 percent in 2006—to 10 percent in 2015. Mortgage brokers bring choice and service to the consumer and Motto Mortgage will work to expand the market share of mortgage brokers and bring better mortgage choice and service to consumers as a result.
Motto Mortgage will inspire new specialists to join the profession by offering them tools, resources and a built-in relationship with a real estate brokerage, including direct access to agents, the company states.
“We look forward to the return of mortgage brokers and skilled loan originators to the market,” said newly named Motto Mortgage President Ward Morrison, who has been with RE/MAX, LLC for 11 years and most recently served as vice president, Region Operations and Business Opportunities. “Our priorities will be educating, training and supporting our franchisees so that they can provide exemplary customer service to their clients.”
Pairing a Motto Mortgage franchise with a real estate brokerage means homebuyers can work with a real estate agent to find a home and with a Motto Mortgage loan originator to secure financing in offices at one location. And Motto Mortgage loan originators will not be bound to the products of one specific lender but will have access to quality loan options from various sources.
“Because choice and service matter, Motto Mortgage will offer a variety of mortgage options while promoting honesty and complete disclosure, making it extremely consumer-friendly,” said Morrison. “It’s the one-stop shop homebuyers want and the experience they will soon come to expect.”
Liniger drew a parallel between Motto Mortgage and the creation of the multiple listing service (MLS). “The MLS meant consumers didn’t have to go to 20 or 30 different brokers in town to see all the available listings. With the MLS, they had access to everything,” Liniger told RISMedia. “Now, consumers won’t have to go to 10 different banks—they’ll have easy access to wholesalers who can give them information on the best products from different companies.”
“Any time the consumer is better served with the option of one-stop shopping, it’s good for all involved,” said RISMedia President and CEO John Featherston. “RE/MAX has reduced the barriers for medium and small-sized brokers to get back into the mortgage industry. For the broker/owner who chooses to invest in this new opportunity, this enables them to be a part of the home-buying process in a much greater and more impactful way…it potentially gives them a big competitive advantage.”
“The major regional real estate firms often have their own mortgage company, and you have to have millions and millions in capital to do so,” explained Liniger. “With Motto Mortgage, we’re leveling the playing field in the mortgage industry, just like franchising did in the real estate industry. By creating this mortgage franchise, we’re giving that benefit to all companies in the market, not just the regional giant.”
On the decision to make Motto Mortgage available to all, Liniger explained, “REALTORS® are the most cooperative group of people of any industry I’ve ever been in. They’ll fight tooth-and-nail to get a listing, then open that listing up to everyone and give you half if you help sell it. We go to conventions and freely share best practices with other brokers and agents because it makes the entire industry better. As a franchisor, we’re able to give better service and product to consumers. Offering Motto Mortgage to the entire industry helps everyone. We can provide all the advantages of being large.”
Liniger concluded: “Motto Mortgage is a consumer-friendly addition to the real estate office, offering transparency and convenience. This is a value-added service that many agents will be excited to have onsite. It also gives brokers the ability to grow their business on more than one income stream.”
Motto Franchising, LLC is based in Denver, Colorado, and will now begin actively selling franchises in certain markets. Each Motto Mortgage franchise will be independently owned and operated. For more information, please email firstname.lastname@example.org or visit mottomortgage.com.
RE/MAX will discuss the launch of Motto Mortgage in more detail on its third quarter earnings conference call on Friday, Nov. 4, 2016, at 8:30 a.m. Eastern Time.
For more information on Motto Mortgage services, click here.