Company Markets Mortgages As Financial Service of CPAs

To Mark Klein, a mortgage is just another financial tool.

So when the former CPA saw a chance to provide mortgage lending services through accountants and financial planners, he formed a company to do just that.

Since it was formed in 1992, Pacific Coast Lending has stuck to an unusual business model: marketing its mortgage products exclusively through CPAs and financial planners, who in turn, offer the company’s services to their clients when the need arises.

The idea is to provide long term mortgage lending and consultation so that clients can adjust their mortgages as their financial and family needs change.

“Today a mortgage is defined as one of the largest financial instruments people have in their life,” said Klein, founder and president of the Agoura Hills-based firm. “People refinance in California every three to five years. They have a significant equity buildup that they want to tap into. Our job is to make sure your mortgage is the most optimal at any given time.”

Pacific Coast manages about $1 billion in mortgages, although some of that includes tracking the mortgages held by clients who have not used Pacific Coast as their lender, at least not yet.

The company last year wrote $255 million in loans, down about 10 percent from the prior year. This year Klein expects loan originations to be down another 10 percent, but he points out that the rest of the industry is down an average of 40 percent or more.

And while refinance lending has slowed to a crawl throughout the industry, Klein believes the pace of lending at Pacific Coast, where refinancing still accounts for 65 percent of the loans, is far more brisk thanks to the company’s business model.

“We have high net worth individuals that want to leverage their money,” said David Gittelson, vice president of business development for Pacific Coast. “They want to buy their office building or they may have cash issues. They have kids going to college or there’s a divorce. There’s so many different reasons that someone may want to change their mortgage that a mortgage has become a financial product.”

Change in rules

Gittelson joined Pacific Coast in 2001 following a change in regulations that allowed CPAs to sell products such as insurance and stocks and gave Pacific Coast the ability to offer a revenue sharing program.

CPAs who participate are paid anywhere from $1,500 to $5,000 depending on the size of the mortgage, a fee, they say, that helps them provide assistance to their own clients at no cost.

“CPAs get paid by the hour. Here, rather than getting paid by the hour we’re instead sharing in the fees,” said Bill Wolf, partner in charge of tax and accounting services at White, Zuckerman, Warsavsky, Luna, Wolf