A mortgage company that is co-owned by a Lawrence resident has been named one of the 500 fastest-growing, privately-owned companies in the country by a national business magazine.

Overland Park-based Mortgage Sources Corp. was ranked 430th by Inc. Magazine in its current edition.

The company operates a branch office at 1321 Wakarusa Drive, and Lawrence resident Joel Kaczor is one of the company’s three owners. The other owners are CEO Kevin Kleweno, Overland Park, and Patrick Toepfer, Hays.

The company, which provides a variety of home loans to customers, posted a 401 percent growth rate from 1998 to 2002, and its sales totals rose to $3.4 million.

Kaczor credits much of the company’s success to a unique strategy it adopted when it was founded in 1997 by Kleweno. The company operates its own lending business in addition to acting as a mortgage broker. A mortgage lender makes loans to people using the company’s money, while a mortgage broker arranges loans using other lending companies and receives a fee for brokering the deal.

Most mortgage companies are either a lender or a broker, but few play both roles, Kaczor said.

“Basically it allows us to have an almost unlimited number of mortgage products to offer, and that’s what customers are looking for now,” Kaczor said. “They want to have options.”

The company also has benefited from the boom in home purchases and refinancings that began in 2001 as interest rates reached historic lows. Economists are predicting rates will rise again, but Kaczor said he thought the company would continue to post impressive gains.

He’s predicting the mortgage industry will benefit from a new round of refinancings fueled by people who took out adjustable rate mortgages. Kaczor said there were a large number of people who signed up for adjustable rate mortgages to take advantage of falling rates. But now that rates may rise, he said many would be looking to lock in a rate by changing to a fixed-rate mortgage.

Mortgage Sources Corp., 1321 Wakarusa Drive, made Inc. Magazine's list of the 500 fastest-growing, privately owned companies in the country. Joel Kaczor, part-owner of the mortgage company, is pictured Wednesday under a framed copy of the magazine.

“The low rates have been great for our business, no question, but we think a lot of people will still have a need for us if rates rise,” Kaczor said.

Kleweno also said he thought the company would benefit from predicted consolidation in the mortgage industry. As rates rise, he expects several mortgage companies to close because they don’t have a business model that works well in a higher-rate environment.

“I think there are several that aren’t in it for the long haul,” Kleweno said. “They’re like trees with very shallow roots.”

Kaczor said the Lawrence office has hired five employees since it opened in 2001, but he doesn’t predict an increase in its work force anytime soon.

The company employs 40 people. Its other offices are in Overland Park, Hays, Salina, Dallas, Houston and Palm Beach, Fla.

Inc. Magazine publishes a list of the 500 fastest-growing, privately-owned companies each year. The companies are picked from applications submitted by each company. They’re ranked by the percentage sales growth posted during the past five years.

Companies must have had at least $200,000 in sales in 1998 to qualify for the list. Companies are required to provide the magazine with copies of their signed tax returns to verify their sales totals. A receptionist in Inc.’s offices in New York said several thousand companies applied for the list, but said an exact total was not readily available.