If you want a champion for The Mortgage Broker, you need look no further than Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM), the largest wholesale lender in the country.
In a keynote presentation at the Originator Connect conference, he not only relayed his support for mortgage brokers and how they are the best option for anyone looking for a mortgage loan, but that they are in a position to take over the majority of the market share of the mortgage space.
“I believe brokers can get back to 50%,” he said. “The retail branch model does not work in this market. It really doesn’t work ever; they got away with it because of the crash and a whole lot of people left the brokers, but it’s come back. Brokers will grow to 40-50%.”
Mortgage brokers had about half of market share before the crash. According to UWM, in 2006, broker market share was at 56%, and that had dropped to 7% by 2001. Currently, however, mortgage broker market share is 18%, and it’s projected to go up to 25% by 2025.
Whether or not that’s accurate remains to be seen, but the key to capturing market share is the growth of individual mortgage broker business, and Ishbia said that brokers are in a better position to grow now than they have in the past due to several reasons, including:
- Access to more products
- Regulatory changes
- Support for brokers and a collective voice through organizations like AIME
A lot of people—brokers included—thought brokers would never bounce back from that 7% low, and Ishbia gives two reasons why.
“One, compliance. [People thought] brokers aren’t going to be able to succeed in compliance, because they’re going to be legislated out. Two, technology. Most broker shops are three/four person shops. They can’t build technology. But what they didn’t bet on was great wholesale lenders, and not just UWM, there’s a lot of great wholesale lenders out there, building the technology for you guys,” he said.
Many people thought that technology was going to replace their position, but as technology changes and more originators have incorporated various types of technology into their daily processes and long-term strategies, they have realized that it’s only a part of their overall role. In fact, many originators have said that technology has freed them from the tedious part of the job and allowed them to embrace the actual meat and potatoes of being a mortgage broker, which is advising their clients on the best mortgage for their individual situations and long-term goals. When used correctly, technology has actually made their lives better.
“Technology comes in and creates efficiencies,” Ishbia said. “Efficiencies, then, reduce costs. When costs are reduced, what happens? Margins get squeezed. You know who the fattest margins out there are? Your big retail lenders. The big retail lenders are getting squeezed, that’s why they’re trying to cut our comp right now.”
In order to grow on an individual level, originators can’t be afraid to be different. Challenge the ‘whys’ of doing things, and understand that just because something is the norm, doesn’t mean that it’s a rule. It’s okay to change the game.
Ishbia gave some examples of practices that may fly in the face of convention, but that have worked out for UWM, including being “overstaffed” and doing right with no expectation of return. Admittedly, it’s a little easier for a large company like UWM to take risks, but there can certainly be parallels with smaller broker shops.
Doing right without an expectation of return, for example, is something that originators face with referral partners each and every day. Most partnerships aren’t going to be a tit-for-tat relationship, because access to borrowers differ with each partner. All you can do is do your best to get your partners business and keep their clients happy who they’ve referred to you. You can’t expect that they’ll send you all of their clients, but do the best that you can to help them, and it’s much more likely that they’ll want to work with you as much as possible.
“It’s about doing right by people, not about return on investments. Return on investment is always a ridiculous thought process. Don’t think like that. Think about winning. Think about being better. Think about improving, not return on investment,” Ishbia said.
The better brokers get at building their business, the quicker that majority market share will be attained. Isbhia offered two strategies to aid in building business, the first being setting measurable goals. Write down your goals and have an accountability partner, whether it’s a mentor, a colleague, or a spouse.
“If my goal is to do five loans a month as an LO, 60 loans this year, write it down, show it to your partner, show it to a person in your office. I post our goals everywhere. You know why people don’t set goals? They’re afraid of missing them. Who cares? Who cares if you miss a goal? You know what happens when you set a goal? You set a goal, you write it down and show it to one person, you know what your chance of hitting that goal is? 50% better, and you didn’t have to do anything different.”
The second strategy gets more difficult the more successful you get: never relax. Always push for more, always strive for that next goal. There’s always something to aspire to, whether it be the volume of loans closed, the size of your team, or even the amount of loans closed while reducing your time in the office.
“Don’t stay comfortable with where you’re at,” Ishbia said. “We are all going to win together. I’m not sure of it, I’m 100% positive. I don’t think it, I know it. As long as we don’t relax, as long as we don’t get comfortable, keep pushing yourself. And I’m not saying you can’t enjoy life, of course, but don’t ever settle. Because if you settle, someone else behind will take your business. There’s no guarantee.”