The Money Goes Round and Round

Years ago there was a company called PSFS; Philadelphia Saving Fund Society. If you are in the Philadelphia area you will probably know that the PSFS Building is the first skyscraper in the US built in the International style (functional architecture without any decoration). PSFS no longer exists but they were a prominent lender until the late 1980's and today the building is the Loews Philadelphia Hotel.

Back in the 80's PSFS had a retail branch in Campbell, California and they used to broker second mortgages to my office at Old Stone Credit. PSFS wrote mostly first mortgages and I wrote mostly seconds. Old Stone wrote the seconds and then sold them on the secondary market. Here is where the money goes round and round.

A client would go to PSFS to apply for a loan. The branch could not do the loan so they brokered the loan to me at Old Stone. We funded the loan and then we would bundle our loans and sell them on the secondary market to ................PSFS.

I was reminded of this just yesterday when one of our loan officers told me that his client was turned down by the local branch of Wells Fargo. The client came to us at Mortgage Magic and we brokered the loan to Stearns who immediatley sold the loan to ............Wells Fargo.

I have always gotten a kick out of how the money flows. At one time we brokered loans to Integrated Capital. We were approved with Countrywide and Integrated Capital. We compared rates and it was a better deal for our clients to take them to Integrated Capital who then sold the loan .........you guessed it....to Countrywide.

Interesting how the money circulates. As I am writing this article it is also interesting: PSFS was a long time savings and loan; now they are gone. Old Stone was the oldest chartered savings and loan in the nation, more than 160 years old and now they are gone. Integrated Capital is gone and everyone knows the story of Countrywide. They are all gone. Little Mortgage Magic is still here after 21 years and one day we too will be gone. But, the money will continue to run in circles.

Doug Jones
Mortgage Magic NMLS 286668