Brokers Rallying Against Whole-tail Lending (BRAWL), a national network of independent mortgage brokers, has released its inaugural Lender Scorecard, which ranks 30 wholesale mortgage lenders on the strength of their relationships with brokers.
“These Lender Scorecards are a major step forward in terms of transparency in the wholesale mortgage industry,” said Anthony Casa, founder of BRAWL and president of Garden State Home Loans, one of the nation’s largest mortgage brokerages. “Moving forward, mortgage brokers will have something tangible at their disposal that will help them understand which wholesale lenders are out to help them, and which ones will likely hurt their business long-term.”
BRAWL’s Lender Scorecard praised six companies as “true broker partners”: American Financial Resources, MB Financial, Nations Direct Mortgage, Parkside Lending, Plaza Home Mortgage, and United Wholesale Mortgage.
On the flip side, BRAWL classified 15 wholesale mortgage lenders – half of the rated companies – as whole-tail lenders, primarily retail-focused companies operating in wholesale. Prominent companies that landed on the whole-tail list include Fairway Independent Mortgage, Freedom Mortgage, loanDepot, Quicken Loans and Stearns Lending.
Dave Schroeder, Quicken Loans Mortgage Services senior vice president, defended the company in an emailed statement to MPA.
“QLMS remains intensely focused on our partners’ success,” he said. “Through industry-leading technology, innovative lead sharing programs and aggressive pricing, we place our focus on providing our partners with the edge they need to grow their businesses. Our market share has nearly doubled over the last year, showing that mortgage brokers appreciate substance over rhetoric. The response to our Select pricing has been phenomenal. We’ve especially seen a substantial increase in share from the top 100 brokers in the country.”
BRAWL’s scorecard was calculated using 12-month data from public sources, submissions to BRAWL by some of the wholesale lenders or a combination of the two. Points are assigned for various factors such as loan origination allocation (percentage of volume attributed to wholesale vs. retail), the extent to which each lender defends brokers’ business and how proactive each lender is in supporting brokers.
Based on the total score, each wholesale lender was placed in one of three tiers: true partners, in the middle and whole-tail lenders.
BRAWL described each category as follows:
- True Partners: Lenders that are committed to the wholesale channel and go out of their way to help brokers grow their business and maintain past clients.
- In the Middle: Lenders that may have great service and great technology, but they fall short on returning brokers’ business to them. Proceed with caution, as they don’t have the same client loyalty tools in place as true partners.
- Whole-tail Lenders: Lenders that pose as wholesale lenders, but steal business away from brokers by retaining loans and repurposing them for their retail division. Their wholesale divisions are merely lead-generation tools for retail loan originators, as they buy customers for life by initially offering pricing incentives.
BRAWL will update the scorecards on a quarterly basis. As additional data comes in from wholesale lenders that did not initially participate, updated scorecards will be provided.
“The BRAWL movement has been effective in sparking real, positive change,” Casa said. “Lenders have been proactively working with BRAWL to transition their companies to policies that protect and support the business-growth efforts of mortgage brokers.”
Casa spearheaded BRAWL’s launch in October 2017 to combat whole-tail lending practices. The movement has steadily gained traction – more than 9,000 independent mortgage professionals and big-name lenders like Parkside Lending, Plaza Home Mortgage and United Wholesale Mortgage have all expressed their support. C2 Financial Corporate, the nation’s largest mortgage broker, announced its backing in February.
“The consistent message of BRAWL is our customers are our customers, and we are no longer going to allow lenders to steal our customers and us continue to send them new business,” said Ron Temko, C2 Financial Corporate spokesman. “Mortgage brokers should be offered the same protections that financial advisors have when they place their clients with various financial institutions.”