Cornerstone Mortgage Center Inc.

Michael Powell had seven years of experience in the mortgage banking business when he decided to start his own firm. The deal was sealed when he talked his cousin Jeff Smith, with his newly earned M.B.A. from the University of Memphis, into joining him as a partner.

Cornerstone Mortgage Center Inc. was started in January 1999 with $50,000 borrowed from family members. Powell, company president, originated the loans, and Smith, vice president, processed them.

Things went so well that the startup money was repaid after the first 10 months of operations. Last year, the business made the transition from a mortgage broker to become a full-service mortgage banker, and revenue surpassed $2 million. The staff size now stands at 23.

“We’ve accomplished everything we set out to do in five years,” Smith said. “We’re now looking beyond anything we ever dreamed of for the next five years.”

The transition to mortgage banking brought more in-house control over the loan process with the additional risk and responsibility of reviewing and underwriting.

It was part of the plan to create a mortgage company that functioned more as a mortgage consultant. The success of the business is tied to the time-honored method of word-of-mouth advertising/referrals.

“We’re not out to do every loan that comes to us,” Smith said. “We want to do what’s in the best interest of the customer because we know that will come back to us.”

The source of customers is divided roughly among real estate agents, 50 percent; past clients, 25 percent; friends and family, 20 percent; and advertising, 5 percent.

Opening a North Little Rock office is envisioned to help maintain revenue growth that has topped 50 percent annually.

Smith and Powell are supporters of two charities that help at-risk youth: STEP Ministries and Big Brothers, Big Sisters. They donate $25 to the programs for every loan Cornerstone closes.