Independent mortgage brokers are beginning to have the products and tech tools needed to compete with banks and large retail lenders, and customers are reaping the benefits of this growing channel. HousingWire recently spoke with Desmond P. Smith, chief growth officer for United Wholesale Mortgage, about the transition from retail to wholesale for brokers and what the future of the independent broker channel holds.
HousingWire: What changes have you seen in the wholesale channel over the past year?
Desmond P. Smith: The glaring trend is the broker channel has been growing rapidly, and the retail sector is shrinking. With that being said, we’ve seen an increase in consumer education across the board. In this current rate environment, borrowers are shopping more and realizing that it is cheaper and easier to go with a broker as opposed to large banks or retail shops that are constantly being advertised. They are now seeing that they are the ones paying for those ads.
In the past year alone, the product, pricing and technology offerings, exclusively for independent mortgage brokers, have been extremely competitive compared to what large banks and retail lenders can provide. For example, UWM has released a variety of competitive offerings including Prime Jumbo products, HELOCs, temporary rate buydowns, and, of course, Game On pricing. In addition, we recently announced UClose 3.0 and TRAC, which are allowing for a faster, cheaper and more efficient closing experience.
These types of offerings have been made for the sole purpose of helping consumers and brokers. Our goal has always been to elevate the broker channel, and this past year has put a spotlight on proving mortgage brokers are the cheapest, fastest and easiest way for a consumer to get a loan.
HW: What feedback have you heard from those who have made the transition from retail to wholesale?
DS: We’ve heard nothing but fantastic feedback from those who have made the transition. If anything, we’re hearing a lot of “why didn’t I do this sooner?”
The reality is brokers have more options and more flexibility in the wholesale channel. In addition to the products I mentioned before, there are also a variety of tools and resources brokers can use to help elevate and grow their businesses.
The amount of support within the broker community is truly tremendous. For anyone who may be considering making the switch, just know there is a whole network of folks out there ready to help and keep any discussions you have confidential. We’ve already seen thousands of brokers make the transition from retail to wholesale in the past year and we expect that trend to continue.
HW: There’s a lot of doom and gloom in the industry right now. What advice do you have for brokers navigating this market?
DS: Mindset is everything. Now is not the time to sit back and wait for market conditions to improve. Now is the time to differentiate yourself from your competitors.
Client experience should be your main priority. In today’s market, the borrower you’re working with right now will likely do another loan in the next couple of years when rates go down. Maintaining your relationships with these borrowers is key. This will ensure you stay top of mind for their next loan or referral.
The reality is you don’t win by sitting around and waiting for success to come to you. You have to work for it. We will all feel and see our hard work pay off together in 2024 and 2025, but we have to be putting in the work now to see those results.
HW: What do you think the future of the broker channel is for the long term?
DS: The broker channel has an extremely bright future. It’s inspiring to see new broker shops open every week and watch the broker community come together to ensure the channel continues to grow market share.
Recent HMDA data shows that independent mortgage brokers are saving borrowers over $9,400 over the life of the loan, and even more than that for minorities These are incredible numbers that are further proving to consumers one of the many benefits of working with a broker. The facts are there; we just need to continue educating, building long-lasting relationships and adapting to the ever-changing industry.
Like I said before, we’re not going to see the success of the hard work we’re putting in now until 2024, 2025 and beyond. I have complete confidence that the broker channel is going to continue taking advantage of this current environment and dominate for many years to come.
Learn more about maneuvering through the independent broker channel at UWM.com.