There’s something about cheering for the underdog, and for the past decade, mortgage brokers have been the obvious underdog.
Those days, however, may be coming to an end.
Mortgage Broker market share is creeping steadily upward, and while brokers still have a long way to go to fully educate the masses on their value proposition of shopping mortgages for the consumer, they’ve made huge strides when it comes to becoming visible and gaining trust with referral partners. The Association of Independent Mortgage Brokers (AIME) has declared July 18th National Mortgage Brokers Day (#NMBD), and coming off of two consecutive quarters of growth in the broker channel, independent brokers certainly have something to celebrate.
Obviously AIME wants to alert consumers to the differences between mortgage brokers and retail loan originators and highlight the benefits of using a broker, but #NMBD is also a chance for brokers to share why they’re in the channel, and for players within the industry to show their support for the broker channel as a whole. Lenders who support mortgage brokers will be getting in on the action, as well as a number of technology platforms and vendors. AIME has engaged with these lenders and vendors, and all are also encouraging their employees who work with mortgage brokers, from underwriters to account executives, to demonstrate their support for local mortgage brokers on social media.
AIME itself will be running a social media campaign and doing a series of social posts, as well as doing a live stream on Facebook and LinkedIn Live, having conversations throughout the day with mortgage brokers about how they’re working to serve their community and the growth that’s taken place over the last year.
“In Q1, basically we saw the best quarter in 12 years for wholesale market share. It jumped all the way up to 15%, and right now, all the projections for the year have been revised all the way up to 20% by year end for mortgage broker market share, which is a massive increase; that was the projection for the end of next year,” said Anthony Casa, AIME chairman. “It’s great to have all the brokers coming to our event and happy to support one another, but when the actual data supports the growth, that puts a lot of momentum behind it.”
The growth is due to a number of reasons, one being that from an execution standpoint, mortgage brokers have the ability to deliver a loan in the same amount of time as retail lenders—if not faster. That’s a strong selling point, along with the fact that technology has closed the gap between the services that loan originators are able to offer in different channels. Referral partners are more comfortable working with mortgage brokers now, and the support of United Wholesale Mortgage has been a big boost to the broker channel as well.
More than anything, Casa said that the growth of the broker channel us due to the power of AIME’s lobbying efforts to retail loan originators. Talking to retail originators about how they can become brokers and how to get help during that transition has been a big factor in lifting the number of mortgage brokers from 34,000 loan originators to more than 40,000 nationwide.
“Consumers work with loan originators. Loan originators work for either lenders or mortgage brokers. So when you take 6,000 out of the retail and you bring into the broker channel, they’re going to bring all those consumers with them, and that’s been the biggest driver. In Q1, that was the largest single quarter for loan originators going from one channel to the other since they’ve been recording that data, and in Q2 we expect there to be an increase of about 50% from that number in Q1,” Casa said.
Brokers have also benefitted from more consistent messaging, something that will be further solidified on National Broker Day. Rather than each broker working to brand themselves and their businesses individually, AIME has worked with brokers and encouraged them to talk more about the channel as a whole—hence the whole Brokers are Better campaign. Consumers don’t always know the differences between brokers and other loan originators who work for a bank or a retail lender, and showing a unified front with a unified message helps with that distinction.
Casa said that a low rate environment tends to favor the technology-based retail platforms, but mortgage brokers tend to be stronger overall in the purchase market. Since purchase applications have continued to increase, he’s confident that brokers have staying power. Apart from consistent messaging, the continued growth of mortgage broker market share is dependent on brokers being very intentional about communications, and where they can help consumers where others can’t.
“What it comes down to is being really, really visible in your community, and being that thought leader when it comes to mortgage and real estate finance,” Casa said. “It’s really important that people understand that it’s one thing to work with a local loan originator; it’s another thing to work with a local independent mortgage broker because of the fact that they don’t work for the bank, they work for the consumer.”
In order to keep up with the mortgage companies that have marketing budgets reaching into the billions, AIME is providing plenty of opportunities for the entire channel needs to be more vocal and more visible.
Brokers are answering the call. They’re louder, they’re more active when it comes to consumer engagement, and they’re shattering that underdog status one day at a time.
July 18th is National Mortgage Brokers Day. Click here to learn about AIME’s plans to bring awareness to the value propositions offered by mortgage brokers.