In today’s low-rate environment, wholesale mortgage lending continues to grow, making up more than 20% market share. Three independent wholesale brokers discuss how they found success in the wholesale channel during a HousingWire webinar on Thursday titled: “Taking the Mortgage Boom to the Next Level.”
Independent wholesale brokers on the webinar included Mike Kortas, CEO of NEXA Mortgage, Tacy Nichols, president of mortgage lending for Gapital Mortgage, and Christine Smallwood, director of operations at United Financial Group. Phil Shoemaker, president of originations at Home Point Financial, also spoke, while Clayton Collins, CEO of HousingWire, moderated the webinar.
Shoemaker predicted low rates will continue through 2021 but said that companies that are going to succeed after a shift to higher rates will be the ones that work on lower-cost platforms, have more flexibility from an execution standpoint, focus on purchase and have a willingness to build relationships with referral partners.
The brokers were in agreement that recruiting talent and maintaining strong partnerships will be key to not only brand development, but a lasting foundation that will continue post-pandemic.
“So really, it’s a team effort, the reason we got to where we’re at is because of the team involved behind it. Because as loan officers, they believe that there’s nothing better than a broker channel, and to them this is most important for their consumers,” said Kortas. “We then make sure we’re absolutely looking out strongly for the loan officers, they trust us that we’re constantly making it better in everything we’re doing.”
Nichols pointed out that after the 2008 financial crisis, wholesale lending began using technology that helped match pace with the processes of retail lenders. Learning to utilize that technology for a database that can be used to maintain constant contact with clients and retain business was crucial, Smallwood said.
“We’re not out building a retail person’s name. We get to build our name with the same great platform and the reality is, you’ve got the technology to really track that business and create a process to foster the relationship for four or five or six times over the person’s life. I mean we’re talking up to 30 years,” Nichols said.
While wholesale brokers lack the support of a physical location like retail, Kortas said virtual platforms help maintain reasonable costs and internal support staff help streamline processes. For Nichols, who runs a smaller setup, transparency, pre approvals and the flexibility of taking loans to other partners has helped create more opportunities for all involved.
When starting out in funding and warehouse lines, Smallwood said the process doesn’t happen overnight, but figuring out what you want for your partners is a huge step toward success – and being in wholesale means more control.
“There are tons of options out there. You can even draw your own docs and you could do your own certificate of deposits. That gives you a little bit more control. When we talk about things like this, it’s huge to me that we have just a little bit more control than a regular broker, being able to pull in, talk to people, and then weigh in because we are funding our own stuff,” Smallwood said.
According to the panel, growing market share doesn’t just come from building relationships with clients, but strengthening the brokerage community overall. Shoemaker said wholesalers will win or lose based on execution – the secret sauce isn’t so secret anymore.
Kortas said he actually trains his competition and his licensing team helps loan officers get licenses because that will make the environment stronger in the long run.
“One of the things I’ve really enjoyed the last few years is if you look at the wholesalers out there, the wholesale lending community and the people that are really focused on expanding market share and wholesale, it’s a very collaborative environment,” Shoemaker said. “The way I personally view it is: Look, there’s no harm in sharing information that makes everyone better.”