More and more industry insiders are realizing that the buzz around mortgage brokers is more than just a passing fad. Instead, it’s a true revival of a channel that came close to dying a decade ago.
Mortgage brokers have experienced a lot of growth and a lot of change in the last few years, and one of those changes is the number of choices that are available to them. That is allowing brokers to make the best choices for their clients, says Austin Niemiec, executive vice president of Quicken Loans Mortgage Services (QLMS).
“You're seeing a lot of very good lenders compete for brokers’ business. And with competing, you're seeing the bar for technology rise, you're seeing pricing getting better, you're seeing process speeding up,” Niemiec said. “Choice is what's making this environment for brokers so attractive, in my opinion, and brokers are doing an incredible job taking advantage of it, and winning business.”
For new brokers who have come to the channel from a retail background, the choices can be somewhat overwhelming. Having to deal with everything from branding to marketing to IT support when a company used to manage all of that is a big change. It can be freeing and exciting for originators, and it’s important for them to learn ways to connect with other brokers and embrace the challenge.
Despite the tough choices, brokers are in a great position now because there’s plenty of business to be had, and there are great lenders doing everything they can to fight for broker business. Those lenders are offering independent brokers products and marketing materials to support their growth, but that’s not the only thing that goes into a successful partnership between a broker and a lender.
Niemiec said that there are a lot of factors that go into a strong lending partnership, but when looking at a lender there are three things that a broker should consider that are more important than the rest:
- A reliable process
“They're dealing with referral networks, and if they don't provide a great experience for that client, it's going to be hard to continue to win business from those networks,” Niemiec said. A reliable process where brokers, borrowers, realtors and other partners know what to expect is an important part of making that process repeatable.
Clients and partners have come to expect not only a predictable transaction, but one that a consumer can do from the comfort of their own home, on a mobile device. At the very least, they want the option of having easy-to-use, intuitive technology at their fingertips. New brokers are no different.
“These brokers are growing, they're bringing on loan officers, and these loan officers expect good technology, a good working environment, to plug into portals and process with their lenders,” Niemiec said.
This speaks for itself. In a competitive market, where a growing number of brokers are offering the advisory services that borrowers want and options that suit their needs, price is often a real differentiator.
“It’s competitive out there,” Niemiec said. “The broker community is growing, there's a lot of competition. And you should partner with someone that can give you a very competitive price.”
There’s a very “us versus them” mentality in the industry when it comes to broker versus retail. While it’s understandable, Niemiec takes a slightly different view, starting with the fact that the current mortgage market is an “extremely abundant” one.
“Quicken Loans is the largest lender in America, and only has 7% market share. That means 93 out of 100 folks get a mortgage somewhere else. It's a huge, huge, huge market out there,” he said.
The second part of that is a focus more on collaboration, not competition.
“One of the brokers’ biggest benefits of partnering with us is the fact that we have a retail channel,” Niemiec said, adding that their size allows them to give their partners products and technology that smaller lenders wouldn’t be able to provide.
Brokers have access to QLMS’s mortgage insurance with some of the most competitive prices in the industry, which they only have because of their retail channel. Similarly, because QLMS has a retail channel, they have a small army of technologists and a big budget working to give brokers access to some of the best technology in the space. Niemiec also says that they’re “very blessed” to be very well capitalized, which provides long-term consistent and competitive pricing through most any market.
“We give that to brokers, and they win business because of it,” he said. “All the amazing things that have allowed us to be the fastest growing lender in the broker space over the last year is because of the technology and stability that that we have due to our size.”
The broker channel was nearly decimated after the financial crisis of 2008. The market was a mess and regulation became much tighter, but Niemiec says that one of the biggest reasons for the massive drop in mortgage broker business was that broker choice disappeared. Big lending partners in the space such as Bank of America, Fifth Third, and Wells Fargo ran away from broker business.
Today, as lenders re-enter the space, the choice is coming back, and brokers have more options than they have had in a very long time.
“We can provide so many great things to brokers because of our experience and our size, and brokers can do so many incredible things because of their experience, their reach in the community and their expertise. We combine those two things together. It's a pretty unique partnership, and that's how we're stronger together,” Niemiec said.