Vertical Lend News - One-stop shops: CPAs, financial planners now offering mortgage services

one-stop shop for multiple financial needs, others say going to a financial adviser for a mortgage offers greater convenience, and comparable expertise, as going through a broker or lender.

"It's something clients always came to us for anyway," said Steven Albanese, a certified public accountant based in Long Island, N.Y., who has offered mortgage-loan services, from application to closing, for four years.

Before providing the service himself, Albanese often helped clients assess refinance or purchase loans, and then provided mortgage brokers with tax returns, W-2 forms and the other financial information necessary to write the loan.

Now, Albanese originates loans as an associate with Vertical Lend, a mortgage lender that acts as a kind of back-office mortgage-loan operation for financial professionals nationwide.

Vertical Lend also provides ongoing education and an in-house mortgage expert to shepherd all loans to closing.

"We actually turn the financial professional into the loan originator. They have access to all of the lenders that we deal with," said David Peskin, chief executive of Vertical Lend, based in Melville, N.Y. The company works with about 40 lenders, similar to other mortgage brokers.

Certified public accountants and other financial professionals "can't do it on their own unless they apply with the state and get a license," Peskin said. "Companies like ours make it easier for them to get in the business because it is very difficult to learn this business from scratch."

Albanese said he considered applying for a mortgage-broker license, but New York's requirement of two years' experience working for a mortgage broker stopped him.

The financial professionals working with Vertical Lend are essentially acting as loan officers, and are compensated for each loan processed through the company. However, borrowers don't pay any extra cost, Albanese said.

The exact number of accountants and others offering mortgage-loan services is unclear. Vertical Lend counts about 1,800 financial professionals in 25 states who've signed up for its service. Other companies offer similar services, Peskin said, and individual financial advisers may also apply for mortgage-broker licenses on their own.

Caveat emptor

While going through a financial adviser may be more convenient, borrowers should be wary of a potential lack of expertise, some experts said.

"When you spread yourself too thin, your level of service for an individual item decreases," said Jon Eberhardt, president-elect of the California Association of Mortgage Brokers and vice president of Prime Equity Management, in Torrance, Calif.

"I have agents in here who do securities, but they do not (work on mortgage loans) because it is very, very difficult for them to have that level of expertise," he said.

Conflicts of interest might arise as well, others point out.

"You think of a financial adviser being paid independently to provide advice, yet they're then being compensated for delivering a particular product," said Jay Brinkmann, vice president of research and economics at the Mortgage Bankers Association of America.

But Albanese said that his ongoing relationship with clients means he can't push them into a loan offered through Vertical Lend if a loan elsewhere has better terms.

"Because I have a continuing relationship with them, I would never want them to think that 'hey, Steve put us into this mortgage last year and it was a little higher than everybody else's.'

"I will encourage them to shop, I will tell them that I'm going to shop and in a week we'll put all our information on the table and see which one works out best," he said.

Given the wealth of mortgage rate information available online, in newspapers and through sales pitches, Albanese said clients already shop around before coming to him.

"They look on their own, get approached by other brokers as well, and choose whichever deal they feel is beneficial for them. I'm not able to beat every deal," he said.

If his loan through Vertical Lend is not the cheapest loan, he said, "I'll help the client put together the paperwork for the loan that is cheaper."

Andrea Coombes is a reporter for CBS.MarketWatch.com in San Francisco.