M O R T G A G E C H O I C E 2003 Annual Report M O R T G A G E C H O I C E CHOICE MORTGAGE M O R T G A G E C H O I C E “We’re famous for giving unbiased advice and providing the highest standard of service” Contents Mortgage Choice Overview Company Highlights Directors’ Report Our Directors Overview of Operations Pillars and Foundations Sharing the Vision Our Lender Panel Our Management Team Looking Ahead 2 3 4 5 6 8 12 12 13 16 Our aims and objectives To continue to expand on our position as Australia’s leading mortgage broker. To ensure that the company is profitable every year, and to maximise shareholder value. To research, devise and implement marketing strategies that deliver a sustainable competitive advantage. To provide our customers with a wide choice of home loans, on a truly unbiased basis and a level of service that is both responsive and pro-active. To invest in and develop the most highly skilled, trained and competent people who share our beliefs and values, and who are motivated to achieve our collective goals. To ensure that our dealings with franchisees, customers, suppliers and employees are based on the highest standards of ethics, fairness and integrity. 2003 Annual Report Mortgage Choice Overview Mortgage Choice was established in 1992. 460 accredited brokers, its website and call Against a backdrop of increasing complexity in centre. Its brokers are either franchise owners the home loan market in Australia, it is now the or consultants employed by franchise owners. country’s leading mortgage broker offering Mortgage Choice pays its franchise owners genuine choice of home loans. Mortgage the same commission regardless of the lender or Choice provides a structured comparison of the loan type. When coupled with the fact that it mortgage products available from the company’s has no products of its own, it can truly claim to panel of over 25 of Australia’s leading lenders. Mortgage Choice’s business to date has been predominately residential lending for owner occupiers and investors. The Company originates mortgages through its national franchise system of more than “When coupled with the fact that it has no products of its own, it can truly claim to offer an unbiased service offer an unbiased service. The company’s strategy of providing unbiased information to residential mortgage customers regarding mortgage products, coupled with convenient service, remains a key driver and contributor to its success. Mortgage Choice National Conference 2003 – Royal Pines, Gold Coast. 2 2002-2003 Company Highlights Loan approvals increased by 30% to $ 7.5 billion. Net profit before tax increased by 78% to $9.2 million. Net profit after tax increased by 25% to $6.3 million. Revenue increased by $22.5 million to $76.4 million. Loan book rose from $9.6 billion to $13.5 billion, an increase of 40%. Franchise numbers grew from 296 to 335. Total brokers grew from 394 to 474. Shopfront / commercial premises now stand at 153 which is over 45% of the total network. One new Mortgage Choice office opens each week. Mortgage Choice: Quarterly Approvals M $ 2500 2000 1500 1000 500 0 01 96 02 96 03 96 04 96 01 97 02 97 03 97 04 97 01 98 02 98 03 98 04 98 01 99 02 99 03 99 04 99 01 00 02 00 03 00 04 00 01 01 02 01 03 01 04 01 01 02 02 02 03 02 04 02 01 03 02 03 3 M O R T G A G E C H O I C E 2003 Annual Report Directors’ Report During 2003 Mortgage Choice delivered of Chief Operating Officer, Chris Canty who another strong year of growth. The capably managed the company during our search combination of a strong housing market, a for a new CEO. motivated and customer focused franchise The Board looks forward to the year ahead network and a committed head office with confidence. management and support team ensures the The Board of the Company has recently Company is well positioned to maximise the authorised management to commence the opportunities that lie ahead. preparation of the Company for listing on the The financial result for the year to 30 June Australian Stock Exchange by the first half of 2003 was a net profit after tax of $6.3 million, 2004. The float is subject to sustained an increase of 25% over the previous year. conducive market conditions and a favourable Factors contributing to the Company’s economic climate. strong operating performance for the year include an increased demand for our service, increased productivity from our highly motivated franchise owners and success in franchise recruitment. The calendar year 2003 has seen the appointment of a new Chief Executive Officer, Paul Lahiff. Paul joined the company in August 2003 and has brought significant experience and Rod Higgins Director expertise to the role. The Board are delighted to have somebody of his calibre and capabilities join us. On behalf of the Directors, I would like to take this opportunity to thank the management and staff for their continued commitment and contribution and also wish to recognise the leadership “The financial result for the year to 30 June 2003 was a net profit after tax of $6.3 million, an increase of 25% over the previous year.” 4 Our Directors Peter Higgins Peter Higgins is cofounder of Mortgage Choice. Mr Higgins also holds directorships in companies in the technology and electronics industry. Having been successfully self-employed for over 20 years he has been involved in a number of start up companies in a diverse range of industries covering manufacturing, technology, leasing, property and finance. Age 43. Rodney Higgins Rodney Higgins is cofounder of Mortgage Choice and has a background in residential and commercial property, sales and leasing and has been a director of companies involved in manufacturing, wholesaling, importing, retailing and finance. Age 49. Robert Prowse Mr Prowse is the nominee of Thorney Holdings Pty Limited and joined the Board in February 2003. Thorney Holdings Pty Limited is a member of the Pratt Industries group and has been a shareholder since April 2000. Mr Prowse is an Investment Manager with Thorney Holdings Pty Limited and has significant experience in finance-related industries. Age 52. Peter Clare Mr Clare is the nominee of Wealthpoint Limited and joined the Board in November 2002. Wealthpoint Limited has been an investor in Mortgage Choice since April 2000 and became a wholly owned subsidiary of St. George Bank Limited in early 2002. Mr Clare is a member of the Group Executive of St. George Bank with responsibility for Strategy and previously held positions with CBA and as a management consultant. Age 40. 5 M O R T G A G E C H O I C E 2003 Annual Report Overview of Operations The financial year under review ended with Client retention is a key strategy of another strong profit result and impressive loan Mortgage Choice and our loan book as at 30 book growth for Mortgage Choice. The June 2003 has now surpassed $13 billion making Company has a very stable foundation and is it one of the – if not the – largest loan book of well positioned for solid growth over the next any of the non-bank lenders or mortgage few years. brokers. Our highly respected and award winning Key Performance Indicators franchise system also experienced steady growth The Company’s operating after-tax profit over the period. The number of franchise of $6.3 million is 25% higher than last year and owners grew to 335, an increase of 13%. This reflects the growing acceptance of the Mortgage meant, the Company had a total broker force of Choice brand and consumer proposition. The 474 (including the loan consultants supporting Company has now attained a financial position the franchisees) at 30 June 2003. where the trailing income derived from its loan book is sufficient to cover its fixed costs. The The Mortgage Broking Industry Company is therefore less vulnerable to the The industry has seen two major focal immediate effects of volatility in the housing points of interest during the past year – what market. lies ahead for the housing market and, what form regulation will take. Both of these factors Mortgage Choice’s home lending approval will continue to dominate the attention of all volumes are up significantly achieving a new stakeholders especially the media and other threshold of $7.5 billion, up 30% on last year. observers during the next financial year. Market share of the mortgage market grew to 4.4% (ABS) for the year. Housing Finance Market and Interest Rates 1984-2003 180,000 160,000 140,000 120,000 100,000 M $ 80,000 60,000 40,000 20,000 0 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% e t a R e g a g t r o M e l b a i r a r a V e g a r e v A 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Owner Occupied Investment Average mortgage interest rate Source: ABS; excludes commercial construction finance 6 State of the Housing Market Regulation of the Industry There has been much speculation about the The introduction of the landmark report housing “bubble” and its impact on the demand undertaken by the Consumer Credit Legal for housing finance going forward. Mortgage Centre NSW (Inc.) on behalf of the Australian Choice has held the view for some time that the Securities Commission in March 2003 housing market is experiencing solid growth but highlighted among other things the need for is not approaching the highs of the late eighties. regulation of the industry. The market can be broken down into a As an industry leader, Mortgage Choice series of sub-markets and whilst there has been over the past three years has been working significant growth in the investment sector, closely with industry and government bodies to Mortgage Choice is of the opinion that a escalate the importance of regulating the reduction in demand in this sector will not have mortgage broking industry. Our call for any material effect on the Company’s business. national uniform regulation in September 2002, Housing is now looked upon by a growing together with our accompanying consumer number of consumers as a wealth creation advocacy initiatives, highlights the company’s vehicle and the use of home equity to generate commitment to stamping out unprofessional additional wealth, either through investing in and unethical brokers. This call for regulation further property or equities or in both is now an has received increasing attention and has been accepted investment portfolio practice. reinforced by a recent agreement between the As a consequence the Company has seen various state and territory Consumer Affairs an increase in refinancing for this purpose as Ministers to move to national regulation. well as for debt consolidation and renovations. Mortgage Choice instigated and developed It is worth noting that refinancing, provided it is two key consumer protection initiatives over the in the best interests of the consumer, is an past 12 months that have further positioned acceptable, logical and sensible means to access Mortgage Choice as a leader in consumer or manage their equity. advocacy. Key initiatives included our launch of The plight of first homebuyers seems to be a Customer Charter, which fully discloses the a widespread problem with many developed commission structure paid to our franchise countries faced with the same dilemma of a owners as well as outlining the service reduced demand from this sector. It must be customers can expect from a Mortgage Choice borne in mind that the Federal Government’s broker and what the company’s privacy and decision to increase the first homeowner grant complaints policies are. Following this, to $14,000 in 2000 did have the effect of Mortgage Choice developed a Consumer bringing forward the purchase decision for many Checklist that was launched in March 2003, in this category. It is Mortgage Choice’s view which gives customers a checklist to complete to that what we are experiencing at present is in assist them in identifying if they are dealing with part the after effects of that initiative. a professional and honest broker. 7 M O R T G A G E C H O I C E 2003 Annual Report Pillars and Foundations In order to achieve its objectives for and Corporate Standards Manager. The aim of growth in profitability and market share, all investigations is to fully and accurately Mortgage Choice has developed a strategic determine all relevant facts, enabling a model, which embraces the basic pillars and determination if Mortgage Choice was foundations of the business. It is around this responsible in any way for the customer’s model that this overview will be positioned. grievance. Where possible, final determinations Customer Focused are communicated to customers within 10 business days of receiving the initial dispute From the beginning, the Mortgage Choice communication. philosophy has centred on providing the best possible service to its customers. This starts at Marketing Driven the frontline with our brokers, and through new With the mortgage broking market growing customer focused initiatives that are continually significantly, it is a core priority of the business being developed in all areas of the business. to actively and effectively promote Mortgage With a high proportion of Mortgage Choice’s image, position and point of difference. Choice business resulting from referral and This ensures the company both sustains and repeat business, the importance of providing continues to build on an already strong and outstanding service to customers has been reputable brand clearly distinguishing itself identified as a priority for the business. from its competitors and encouraging Consequently, in March 2003 the Company consumers to choose Mortgage Choice as their launched a Referral Marketing program which broker of choice. embraces past, current and potential clients to ensure that Mortgage Choice is top-of-mind for Campaign Strategy any future needs customers may have. A natural As a marketing driven organisation, consequence of this approach to servicing our Mortgage Choice develops and runs national clients is a “Client for Life” and as the name advertising campaigns to support our suggests this program aims to ensure the franchisees. These campaigns are developed customer is retained. Consumer advocacy is high on our list of priorities and during the year we upgraded our processes for resolving all formal disputes raised by Mortgage Choice customers. All disputes are immediately acknowledged on notification of the customer’s issues and a detailed investigation initiated under the Customer Focused Market Driven Franchise Centered Lender Relationships Reliable Information quarterly and kits are distributed to all franchisees. Each campaign has a different theme that is reflected across all the marketing material. Different channels and media used by Mortgage Choice include, radio, referral marketing, press advertising, television and sponsorships. A typical integrated campaign this year for instance direction of our Compliance Stakeholder Interests included a television 8 commercial (featuring Mortgage Choice franchisees) which was produced in February Mortgage Choice in the Media 2003. Press advertisements and billboards were A proactive media developed to compliment the theme. Meanwhile, live reads were used on radio relations strategy directed at national, metropolitan, networks transforming consumer awareness to regional and suburban lead generation. media has delivered Mortgage Choice was principal sponsor of increased awareness of the Channel 9 Money Expo in Melbourne and and respect for the Sydney 2003. The success of this exercise, both Mortgage Choice brand from a branding and lead generation perspective means the Company will expand this sponsor campaign to other capital cities in 2004. In a and consumer proposition. different vein the Company was also the major Franchise Centred sponsor of Polo by the Sea, a community event Mortgage Choice held in Sydney which raises funds for charity. recognises its franchisees are the core of the business, and without a motivated and focused franchise network, the company would not achieve its goals. Consequently, Mortgage Choice continually aims to improve on the support, Tracy Parish & Robert Walpole, NSW – National Franchise of the Year "Tracy and I have a good partnership. She has the technical aspect and vast lending experience, whilst I have the drive, vision and managerial experience. Developing a strong team of achievers around us is also vitally important to our success". Nick Cook, QLD – National Rookie of the Year "I do my job because I love to provide excellent customer service. I have worked extremely hard to develop and establish a strong business in my local area, and it is very satisfying being able to assist people achieve their property dreams". resources and training that is offered to the franchise network to make their businesses as efficient and effective as possible. The effectiveness of the Company- franchise network inter-relationship is vital for our success and playing a key role in the two- way information transfer process is the network elected Franchise Advisory Council which meets Website A new website was launched during the each month with senior management to discuss year. It is used to provide consumers with useful matters of national and local importance. This information and support our lead generation FAC ensures that there is ownership and activities. Franchisees are also provided with understanding across the network on issues and their own “mini-site” within the Mortgage development. Choice website. 9 M O R T G A G E C H O I C E 2003 Annual Report Pillars and Foundations (continued) Value Drivers The development of lending scenario Under a franchise model, which has proven workshops and training programs for Franchise to be one of the most productive in the Administration Support staff (which are industry, there is a Group Office dedicated to delivered in each capital city) are among other the support of the network. In addition to initiatives introduced during the year. Group Office, franchisees also have access to more local State Offices. IT Support and Development The value drivers of the business include Every Mortgage Choice broker is equipped the brand, marketing support, field support, with a comprehensive suite of applications to lead generation, regulatory compliance, support their broking activities. Mortgage information systems and the successful business Choice’s sophisticated software allows its model itself. All are driven by Group and State brokers access to over 200 products from over Offices and embraced by franchisees. 25 lenders to ensure that its customers get the Training & Development right advice on their home loan needs. To back up its information technology Training is of critical importance to the proposition, Mortgage Choice operates a Mortgage Choice business model. dedicated Helpdesk facility to service the Mortgage Choice is committed to ongoing network. development of its front line people by providing a continuous and powerful learning Rewarding Effort program that is respected by lenders, The success of the business is based on the competitors and professional associations. The quality of customer service together with a learning program involves the delivery of skills, commitment to the franchise model by its knowledge and tools to enable the network to franchisees. retain industry leadership. Mortgage Choice believes it is important Both induction and ongoing training is to recognise and pay tribute to the efforts of its provided to ensure that the franchise network is franchise network. There are two key programs: productive and efficient. Training needs are • Business Excellence Awards - rewarding identified and courses are developed constantly overall business performance, on a state-by- to address those needs. state basis in four franchisee categories The introduction of a Franchise Mentor (Rookies, Single Operators, Multi Operators, System was predicated on the concept of and Multiple Franchise Owners). establishing a learning relationship between the • High Flyers - rewarding top volume mentor (an already established and successful performers. franchisee) and a new franchisee. This assists the In addition, the Company holds a national new franchisee in developing their core conference each year. Under the Mortgage interview techniques and lending knowledge, by Choice franchise agreement, it is a requirement providing hands on exposure to the core that each franchisee attends the conference, business. demonstrating the commitment Mortgage Choice has to this premier event. The 10 conference allows franchisees and their staff to Reliable Information gain new skills and knowledge, as well as providing franchisees, lenders and Mortgage Choice personnel with an opportunity to During 2003, Mortgage Choice implemented a new network, understand each others roles and forge public internet presence. new relationships. As part of this initiative, The 2003 National Conference was held at it provided each franchise the Royal Pines Resort on the Gold Coast, owner with a personal Queensland. The theme of the conference was website incorporating a “Own the Future”. It was the biggest conference powerful content to date with over 500 delegates in attendance. management capability, The conference is also the venue where the allowing each broker the Business Excellence award winners and High flexibility to manage their Stephanie Cook, NSW – National Single Operator of the Year Stephanie attributes the success of her business to her understanding of the demographics / psychographics of the market in which she operates, and the ability to build on the already good name and reputation of Mortgage Choice. Flyers are announced. own local area marketing needs. Lender Relationships An intranet-based knowledge base was also created to provide a wealth of information and With over 25 of Australia’s leading lenders tools to franchisees on the subjects of best on its panel and with an increasing proportion practice, referral marketing, campaigns, of loans being written through the broker editorials and business channel, Mortgage Choice recognises the management. importance of developing and nurturing the In response to the relationships between broker and lender. rapid evolution of the Mortgage Choice has a dedicated Lender mortgage broking market Relations team, which oversees the in Australia, Mortgage encouragement of a culture of information Choice plans to sharing with its lender partners and the implement a new breed of franchise network. mortgage broking Mortgage Choice aims are to encourage support tools for its lender interaction on such matters as client mobile work force during retention and anti-churn strategies. Providing 2004. The plan is to apply structured access to the franchise network and, the company’s more than promoting operational effectiveness by working 10 years’ experience in with lender partners to improve service, and mortgage broking to delivery of end-to-end electronic loan create a fully integrated Wendy Higgins, SA – National Multiple Franchise Owner of the Year Twice National Franchise Operator of the Year, Wendy commenced operations with Mortgage Choice in 1998. She has made her mark in Adelaide, particularly in the Holdfast Bay / West Torrens areas, and now employs 7 people. Wendy still remains unmatched nationally on the number, and volume of loans she writes. processing. ‘enterprise system’. The new system will integrate the franchise management, client management, supplier and product, loan application, marketing and commission and bonus requirements of the business. 11 M O R T G A G E C H O I C E 2003 Annual Report Pillars and Foundations (continued) In addition, during the second quarter, electronically to our top 10 lenders by the end 2004 we plan to roll out a multi-lender of 2004. Electronic submission will shorten electronic loan processing system, which is a cycle times, reduce re-work and substantially collaboration of the big 3 in mortgage broking - improve the customer experience. Mortgage Choice, AFG and Aussie Mortgage Market. This facility will allow our loans consultants to submit loan applications Sharing the Vision The culture of the company is one built on Any strategic plan is only as good as the the foundations of a service culture and high quality of commitment that management and achievement. The ability of any organisation to staff have to the process. At Mortgage Choice affect change and deliver ongoing growth is there is a team of dedicated experienced predicated on a flexible, motivated team of professionals who have proven to be high employees. The human resource efforts of achievers in the pursuit of the corporate goals. Mortgage Choice are aimed at ensuring that our employees have the capability, motivation and leadership to deliver on the key pillars and foundations to both franchisees and consumers. Our Lender Panel 12 Our Management Team Paul Lahiff – Chief Executive Officer Paul is an Agricultural Economics graduate with over 20 years experience in the financial services. This has included roles as Managing Director of Permanent Trustee and Heritage Building Society, as well as senior executive roles with Westpac (in Sydney and London) and the credit union sector. Paul joined Mortgage Choice as Chief Executive Officer in August 2003, and he is responsible for managing the operations of the company to ensure the continued growth and development of the business through effective leadership and the development and articulation of a sound, credible and realistic strategy for the company. Chris Canty – Chief Operating Officer Chris is an Agricultural Science graduate with a Graduate Diploma in Management and has had 14 years sales, marketing and management experience in the agricultural chemical industry. Chris joined Mortgage Choice in October 1997 with a Master Franchise in South Australia and having successfully established the operation in that state, he joined the senior management team that has led the business through a period of rapid growth. As Chief Operating Officer, Chris is responsible for the overall management of Mortgage Choice operations in Australia, with particular focus on sales, marketing and lender relationships, and the maintenance of harmonious and effective working relationships between Mortgage Choice and franchisees. Earle Macgregor, Chief Financial Officer Earle Macgregor is a Chartered Accountant with 20 years broad professional and commercial experience gained with a top tier accounting firm and listed retail and media companies. He has experience in growing and listing companies together with overseas financial management experience in London and an audit and business services background. Earle commenced with Mortgage Choice in January 2002 and is responsible for financial management, control and planning. 13 M O R T G A G E C H O I C E 2003 Annual Report Our Management Team (continued) Mark Newton, Chief Information Officer Mark joined Mortgage Choice in May 2000. He has over 17 years experience in Information Technology, including 11 years in senior management positions. He has extensive experience in the design and implementation of infrastructure solutions and management of applications development on an international scale, gained primarily in the global reinsurance industry. As Chief Information Officer, Mark is responsible for IT strategy, applications development and infrastructure management. He holds a Diploma in Computer Programming Technology and a Business Management Certificate from the Australian Institute of Management. Brent McDonald, Group Franchise Manager – Australia & New Zealand Brent has a Bachelor of Applied Science. He has 17 years experience in franchising and small business management, the bulk of this time was spent in the Australian Oil Industry. Brent joined Mortgage Choice in November 1998 and is now responsible for the management and development of the Mortgage Choice franchise system and the training of new franchisees and loan consultants. Warren O’Rourke, National Corporate Affairs Manager Warren holds a Marketing degree from the University of Technology, Sydney. He has 20 years experience in marketing and communications covering both corporate and consulting roles. Warren has extensive experience in banking and finance, and has also worked in franchising and cause marketing. He joined Mortgage Choice as Group Manager, Marketing and Communications in March 1999. In August 2002 he became National Corporate Affairs Manager and now is responsible for corporate affairs and media issues. 14 Ian Pepper, National Marketing Manager Ian has a Bachelor of Economics from Macquarie University and trained to be a Chartered Accountant with Pricewaterhouse Coopers (PwC). Following fours years in London where he worked with PwC and Equitas Limited, Ian returned to Australia to obtain his MBA (specialising in marketing) from Macquarie School of Management. Ian commenced with Mortgage Choice in June 2000 as Senior Financial Analyst working on strategy and large projects including Franchise Value Proposition and Field Support. However, now as National Marketing Manager, he is responsible for integrated advertising campaigns, franchisee marketing tools, referral marketing and brand integrity. David Hoskins, Company Secretary David commenced with Mortgage Choice in June 2000. He has a Bachelor of Commerce and a Graduate Diploma in Corporate Management and is a CPA and a member of Chartered Secretaries Australia. David has had over 20 years experience in a variety of accounting and company secretarial functions primarily in the finance and insurance industries. As Company Secretary David is responsible for implementing and monitoring corporate governance practices, compliance and corporate standards; administrating Board and shareholder matters; and coordinating legal counsel. Steven Heavey, National Lending Manager Steven holds a bachelor of engineering (civil) and has had 15 years experience in senior management, sales & marketing roles within the construction, manufacturing and finance industries. Steven joined Mortgage Choice in November 2001 and led the franchise network to a phase of rapid growth in his role as Queensland State Manager. During this time, Steven was responsible for the overall management of the Queensland operations and was also responsible for national reward and recognition programs within the Mortgage Choice organisation. In August 2003, Steven moved into the role of National Lending Manager and while maintaining responsibility for the reward and recognition programs, is now focused on the management of commercial relationships and integration of electronic loan applications. 15 M O R T G A G E C H O I C E 2003 Annual Report Looking Ahead The outlook for 2003-04 is positive. While it can continue to grow organically, it also views speculation continues as to whether or when the acquisition positively should market property market will slow and interest rates opportunities present themselves in the future. increase, our experience is that the property Productivity of the Mortgage Choice market is made up of a number of sub-markets. franchise network leads the industry and this Respected forecasters predict that there will be will continue to grow, as we continue to develop some degree of slowdown however, other than the rewards and support to facilitate this. At the the owner-occupier sector, we do not have a same time, growing the franchise owner base is large exposure to any one sub-market. As a fundamental to our short-term growth strategy. consequence, we anticipate that Mortgage In this regard we will increase franchise owner Choice will be somewhat insulated from any numbers by 65 and total broker numbers by 130 downturn if and when it happens. in the period to June 2004. Regulation of the mortgage broking Mortgage Choice is continuing to assess industry is under development and it is likely to the conditions in relation to an initial public result in rationalisation of the industry. This offering which could be as early as in the first has already started with a number of lenders half of 2004. setting minimum standards in terms of industry membership and experience in the industry. Mortgage Choice is of the view that while Mortgage Choice Australia Limited Auditors Level 7, 182-186 Blues Point Road PricewaterhouseCoopers North Sydney NSW 2060 ABN 57 009 161 979 Tele: 02 8907 0444 Fax: 02 9954 4194 www.mortgagechoice.com.au Solicitors Minter Ellison 16 M O R T G A G E C H O I C E 2003 Annual Report M O R T G A G E C H O I C E CHOICE MORTGAGE