Originators vs big banks

by MPA16 Oct 2017
What advantages do mortgage brokers have over their larger banking counterparts? One professional weighs in.

In a special to Mortgage Professional America, Mat Ishbia of United Wholesale Mortgage lays out some advantages the mortgage channel has over banks.

More loan choices. It’s not only advantageous for borrowers to have access to more loan choices, it’s better for loan originators as well. If you’re an originator at a mega bank or retail lender, you’re limited to that one company’s product mix. If your company doesn’t offer FHA or Jumbo loans, as an example, you’re missing out on potential business. Loan originators at mortgage brokers have access to dozens of lenders’ products. If one place doesn’t offer a product, simply find another one that does.

More money. Mortgage brokers offer loan originators a better compensation plan than most retail organizations. And with faster turn times, loan originators are able to turn over their pipeline faster – which means they make money faster and, since it doesn’t take as much time to close a loan, they can get a quicker start on the next loan.
o (As an example, a lot of banks typically cap loan originator commission at something like 50 basis points or 35 basis points – because of overhead costs associated with banks providing the leads. Conversely, brokers typically earn a 1% commission on a loan. Whereas a mortgage banker might make $350 or $500 on a $100,000 loan, a broker would make $1,000).

Ability to be an entrepreneur. Not everyone prefers the Corporate America lifestyle. Some people want to do things their way – build up their business by using their own marketing tactics and customizing their pitch to different clients. On the broker side of the business, loan originators have the opportunity to chase their own professional dreams by opening their own shops and building their own teams.

Flexible schedules. Loan originators have a greater ability to set their own schedules when they work at brokers instead of banks. Whether you work from the office, or work from home, or meet with clients at a coffee shop, it’s up to you. Want to see your kid’s soccer game or mid-day musical at school? No problem. No one is breathing down your back and forcing you to be at the office during “banking hours” or on mandatory Saturdays.

Shop for the best rates and turn times. More than the actual loan products, other factors that make certain lenders the best choice for specific borrowers include rates and turn times. Each borrower is unique from the standpoint of FICO scores, debt-to-income ratio, savings, and personal preferences, so find the best solution for each. Don’t just try to ram square peg into round holes.

What are some other advantages originators enjoy? Have your say in the comments section below.


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COMMENTS

  • by | 10/16/2017 12:36:38 PM

    Completely off on compensation. Most mortgage brokers are paid like their counterparts at retail banks. It's a tired schedule based on the amount of volume they do. Generally from 55 basis points to 80 basis points. Retail bank mortgage officers get less compensation when they refinance a mortgage that is currently with bank already. I have 27 years in the business 18 with the big banks and 9 as a mortgage broker. Being a mortgage broker has many more advantages to the client then this brief article.

  • by | 11/15/2017 10:22:08 AM

    "Generally from 55 basis points to 80 basis points." Way off. More like 80-150bpbs

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