Media Release:
Innovative young mortgage broker tops ratings in respected franchise survey
A Queensland company that started up just four years ago and took on the big names in the ultra competitive mortgage broking business has come out on top of the recently-published “Fast Franchises” survey in the prestigious BRW magazine (Flagship issue January 31 – March 5 2008).
Refund Home Loans, which is building its business on the offer to share the commission paid by the lender to Refund as the broker, topped the rating for “Fastest-Growing Franchises by Outlet” and came in at number four in “Fastest-Growing Franchises by Revenue” – the highest ranked Queensland company in the 50 included in the survey.
Brisbane born Wayne Ormond launched Refund Home Loans in September 2003 after starting his career with the big banks where he became a highly successful lender of Home Loan products and services. Despite his success Wayne became disillusioned by seeing his customers weighed down with high interest rates and increasing bank fees.
“That was when I realised that there was a better way for borrowers, that we should be able to give something back, to say thank you to customers who trust us with the biggest financial commitment most families make – their home loan. This realisation was the genesis of the concept of Refund Home Loans, with the promise of a real cash refund for every loan taken out with us,” said Wayne Ormond.
As with many small businesses, the early days were far from easy. The mortgage broker market is tough at the best of times and Ormond faced up to (and overcame) some harsh criticism and treatment from established brokers, including some very large and publicly-listed companies. The customer promise offered by Refund prompted more than one bank to threaten not to deal with the company; Ormond took action through the ACCC’s trade practices legislation which is currently before the Federal Court.
Today the company has access to a panel of more than 45 lenders, providing customers with the widest range of funding options.
The company is frequently asked how it can afford to make refunds to customers of up to 50% of the commissions it receives from the banks and lenders on its panel, which more often than not are in excess of $1,000.
Wayne Ormond explains that follows from the other side of its business model which is also in contrast with general industry practice: “We don’t want or need a branch network. The research we conducted before starting the business showed people want to discuss their mortgages in their own homes, so we work with the company’s franchisees who work from home. In this way we save money on expensive shop rentals and fitouts and neither do we need huge advertising campaigns but work on word-of-mouth referrals from existing customers – on average two to three referrals every customer. The savings from these areas allow us to share our commissions with our customers.
“Our loan volumes have tripled every year and so far we have refunded more than $2 million to our customers,” he said.
Ormond’s claim that unique service is more important than scale to remaining competitive and growing is reflected in the company’s growth over recent years, in which Refund has built an Australia-wide network of 135 franchisees, who pay a once only fee of which can be as low as $15,000, and is targeting to reach 250 in 2009. (The fee includes the provision of lap top computer and printer, uniform and stationery, full marketing and promotional support and comprehensive industry training.)
Franchisees are recruited through a thorough process of TV info-mercials, workshops and final selection briefings and claims to have a very high retention rate.
Our franchisees have the opportunity to stay involved with their own community and experience lifestyle balance. They can work to their own pace and to their own requirement; some of our franchisees earn over $200,000 a year just from commissions excluding their Trail Income which is a percentage of the loan the franchisee receives as an on-going source of income, for the life of the loan.
“Quite a few franchisees come from blue collar backgrounds. One of Refund’s most productive franchisees earns over $300,000 per year – people like dealing with him simply because he is not a slick banker but ‘one of them’,” said Ormond.
In fact, Ormond is convinced that with the recent stresses on home owners and intending home buyers, including growing uncertainties surrounding the housing market, interest rates and the charges of “unaffordability”, a growing number of people have chosen to deal with a mortgage broker in the privacy of their own home where they feel able to ask questions and express concerns which they might not be comfortable to raise in an impersonal office.
“It is a fact that this has increased as the market conditions have become more challenging, and every time there is talk of a US meltdown, our phones run hot,” he said.
Wayne Ormond is confident that Refund Home Loans will continue its growth.
“The potential for the future is shown in the Western Australian market where an estimated 60% of home buyers source their mortgages through brokers. I believe a growing number of customers will understand the advantages and ease of organising their home loan in the comfort and privacy of their own surroundings. At the same time, with an increasing number of people realising the benefits of working for themselves as franchisees and the competitive advantages that Refund Home Loans offer their customers, I have every confidence that we have everything in place to continue our recent growth in a market that will only become more competitive,” said Wayne Ormond.
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Issued: (DATE) 2008
On behalf of: Refund Home Loans
Issued by: Sawyer Public Relations
Further information: Peter Sawyer (07) 3262 3192 or 0417 626 605