Consumer-direct lenders recapture 56% more customers than brokers

by Kimberly Greene21 May 2019

Home Point Financial, one of the top wholesale mortgage lenders in the nation, recently conducted an experiment, and the results were startling.

The experiment found that loan officers at independent mortgage brokerages were only able to successfully recapture 14 percent of their business from past customers over a six-month period, compared to leading consumer-direct lenders that are recapturing 70 percent of their borrowers.

“Mortgage brokers are at a strategic disadvantage compared to consumer-direct lenders when it comes to staying in front of their customers and driving repeat business,” said Phil Shoemaker, Chief Business Officer of Home Point Financial. “Brokers just don’t have the resources to compete from the standpoint of data, marketing infrastructure and CRM capabilities, but where they can level the playing field, and even outperform retail lenders, is by partnering with a wholesale lender that retains servicing for the life of the loan, does right by the consumer, and empowers brokers to create customers for life.”

Shoemaker recently spoke at an AIME Mortgage Expert Workshop, where he put forth the company’s Customer for Life Program, which gives mortgage originators compensation any time they do a loan for the originator’s customer, even if Home Point Financial gets to them first.

For the experiment, Home Point took no action on the nearly 70,000 wholesale loans that it currently services – no marketing, no phone calls, and no direct mail. During that time period, 1,479 loans were paid off, either because the borrower refinanced the mortgage or sold their home, but only 208 of the loans (14 percent) were recaptured by the original loan officer. That number represents the number of loans that the originator recaptured and took to any lender, not necessarily Home Point.

Mortgage brokers may not have the advantages of direct lenders when it comes to client retention, but they are great when it comes to the client experience. So sharing the relationship with the customer becomes a win-win for both parties.

“A truly effective partnership between a wholesale lender and a mortgage broker is about more than the first 30 days of loan closing, or even the first two years of a loan – that’s just one piece of the process. The real sustainable value comes from the ongoing data, marketing support and quality servicing experience that the wholesale lender delivers to help mortgage brokers stay connected with their customers for the next transaction, even when that transaction doesn’t happen for several years.”

More than half of the top 20 wholesale lenders in America sell off servicing rights to all of their loans, oftentimes within two years – well before most homeowners refinance their mortgages.

Home Point services more than 95 percent of the loans it originates – a number that has grown to be more than 200,000 and increases by 4,000 every month – and positions its broker partners to succeed in

the future by sharing data and offering continued marketing support, in addition to maintaining a positive consumer-servicer relationship.