MPA reported the establishment of BRAWL last month – the moniker stands for Brokers Rallying Against Whole-Tail Lending – which aims to highlight the practice of some mortgage companies that pose as broker-friendly wholesale lenders but are functioning as retail lenders.
"There was a big sense of excitement and, quite frankly, relief, when BRAWL was announced," said Anthony Casa, President of Garden State Home Loans and a founding member of BRAWL. "Mortgage brokers have known about whole-tailers' shady tactics for years, but we just didn't have a voice before. We're speaking up now, and urging brokers to avoid doing business with whole-tailers, because they're setting themselves up for long-term failure by doing so."
The group has now penned an open letter and created a group on Change.org calling for action. Here’s an excerpt:
“Let's get to the truth about lending. Whole-tailers are stealing our customers, but we're the ones handing them the keys to the front door. Let's pledge to partner only with true wholesale lenders until the whole-tailers put an end to their selfish and greedy ways. Let's work together in the best interest of our borrowers and ourselves. Let's keep wholesale true.”
BRAWL says there are some lenders who are operating in “the right way” with a maximum 20% of their business on the retail side. However, on its Facebook group “Stop Wholetail Lending” there is discussion about those who it says do not.
More market update:
A group established by mortgage brokerage industry to rally against whole-tail lending has been gaining traction.