Mark Fabec opened Parker Mortgage in Rocky River with his wife in 2000. Three people worked there part-time and his mom did the books.
Mark Fabec We had a five-year goal to start a business before my 40th birthday and nine days beforehand we got the opportunity. And really we've been able to live our dream for the past eight years.
Fabec was a mortgage broker, a middleman who helps a borrower shop among lenders for the best loan. Fabec kept his company small. At its peak, he made about 80 loans a year, about 20 percent of them subprime. Then last summer, the real estate market fell apart.
Mark Fabec: Even though we can help people still because we did the good loans and everything with all the bad publicity out there I think people just sort of felt that if there was a choice between dealing with us or a bank they were going to a bank right now.
So on January 31st, Fabec closed his doors. Sam Garcia of Mortgage Daily.com says it's hard to find national numbers on how mortgage brokers are doing, but what he hears is bad.
Sam Garcia: There's hardly any business out there and the ones that are left are having to compete with the existing lenders.
In Ohio, the number of licensed mortgage broker companies has dropped 30 percent since January 2007. And 2,000 Ohio loan officers have put their licenses in escrow or on hold between jobs. That's twice as many as six months ago. Dwayne Dawson is trying to ride out the slump with his mortgage company in Richmond Heights. But the numbers of deals he's helped put together in the past year have been dropping fast.
Dwayne Dawson: Percentagewise my numbers have decreased by maybe as much as 75 to 80 percent. I have to do a lot more cold calling. I'm concentrating on commercial transactions as well.
Mortgage brokers have until April to renew their licenses. Kevin Patterson, the president of the Ohio Association of Mortgage Brokers, says that's when he expects the number of people staying in the industry to drop again. He says a new state law stipulating licensing requirements for loan officers and mortgage brokers is part of the problem. Another, Patterson says, is media coverage of those subprime mortgage brokers that put profits over the financial well being of their clients. Patterson says those brokers and loan officers were the exception.
Kevin Patterson: It's been for lack of a better term a perfect storm: with the market, with legislation, with foreclosure numbers. There are many, many great brokers in this state who work hard every day, who have been doing this for years. And they have to go to work every day and tell people they're not a crook. And that's an element of that perfect storm.
Richmond Heights broker Dwayne Dawson is still fighting to keep his company Dawson Mortgage Corporation open. But, he says, if things don't improve soon, he's going to be looking for a new job. Mark Fabec in Rocky River says he was blessed. He started a new job two weeks after he closed his company.
Mark Fabec: It really helped ease the idea of closing. I mean it still hurts when you close down your own business because I poured my heart out into it and I spent the last eight years just giving everything to it.
Fabec is now a mortgage loan specialist with First Federal Lakewood.