A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Mortgage Tech Demo Day

Tune in to our live Virtual Demo Day on February 2nd to experience demos from the most innovative loan origination and valuation tech companies in the industry.

If consumers aren’t holding lenders back, then who or what is?

The challenge for lenders and investors is understanding how to meet borrowers where they are without layering on risk or getting bogged down in third-party intermediation.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.

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Focus on customer retention leads to rise in independent mortgage broker market share

The broker channel is uniting to be bigger and better than ever

In order to look ahead to the future, the Association of Independent Mortgage Experts (AIME) is looking back at some of the factors that have led to the current success in the wholesale mortgage channel.

Specifically, in the almost two years since AIME launched, and as a result of their concerted efforts, major changes have been made by many wholesale lenders that have created a much friendlier environment for independent mortgage brokers to operate their businesses, all of which have led to the growth of the overall channel.

What originally started out as a grassroots movement called Brokers Rallying Against Whole-tail Lending (BRAWL) to bring awareness to the predatory practices of “whole-tail lending” by wholesale lenders has evolved into what is now a drive for change in the mortgage industry, resulting in the largest independent broker share the industry has seen since the financial crisis.  

In the months that followed the initial BRAWL movement, lenders began stepping up to acknowledge the nature of their practices and began dialogue about making adjustments that would allow mortgage brokers to better maintain relationships with their past customers. As some of those initial improvements for brokers began to take shape, the need for a formalized association quickly became apparent.

In March of 2018, the Association of Independent Mortgage Experts (AIME) was founded with the mission of empowering the independent mortgage broker community and aligning the practices of their wholesale lender partners with the needs of brokers.

Broker share by the numbers

AIME spent nearly a year collecting and interpreting data to determine recent trends and identify areas of opportunity for further growth for mortgage brokers.

In 2018, the percentage of borrowers that refinanced with the mortgage broker they initially worked with to secure their mortgage increased by 11.2% from 2017. This is the highest rate of broker customer retention in a year on record based on the available data.

While the data for 2019 has not yet been analyzed, AIME is projecting growth in that retention rate to increase to over 20% of the market share. This is a victory for mortgage brokers, consumers and the wholesale lenders that decided to truly support mortgage brokers.

Reasons for the improvement

The wholesale channel is growing, and there is no greater reason than the fact that lenders have partnered with AIME to provide brokers and loan originators with consistently improved processes for closing loans and retaining customers.

AIME’s technology partners are bringing new solutions that will help mortgage brokers stay connected with their customers in ways that never existed previously.

Ultimately, the broker channel is uniting to be bigger and better than ever. With large tech companies dominating the mortgage industry with their bottomless advertising budgets to acquire customers, it is essential that both brokers and wholesale lenders are nimble to the market’s changes in order to compete.

Major team players

Between 2012 and 2017, the independent broker channel market share growth was flat. Since 2018, there has been an exponential increase, with the market share more than doubling in the last 18 months.

This growth is thanks in large part to a handful of people, including UWM’s Mat Ishbia, who supported the movement and has been a huge supporter of AIME since the beginning.

Additionally, Home Point’s Phil Shoemaker believed in the vision for a new way for brokers and lenders to work together to get optimal results and supported the broker community when it was not clear how successful the end result would be.

Other industry leaders, including Laura Brandao, Kevin Peraino, Brian Vieaux, Sarah DeCiantis, Willie Newman and Sanjiv Das, were all impactful with the support of their organizations, which was an unpopular decision in the early days of BRAWL and AIME.

Continued momentum in 2020

There is still a large opportunity for growth in the independent broker channel, and there are powerful industry leaders supporting the continued success of AIME’s goal to raise the channel’s market share to 25% in 2020.

If you are interested in learning more about becoming an independent mortgage broker, visit https://aimegroup.com/membership/.

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