An exclusive Q&A with Phil Shoemaker, chief business officer at Home Point Financial
It would appear that momentum is on the side of the mortgage broker.
Mortgage broker market share has risen to 14 percent of mortgage originations, which is the highest it’s been since the financial crisis in 2008.
While mortgage professionals and others in the financial services industry can see the tide turning, the general public hasn’t yet hopped onto the broker bandwagon en masse.
The reason for that is the media, according to Phil Shoemaker, chief business officer at Home Point Financial. Power Originator talked to Shoemaker about ways that messaging in the media is standing in the way of much more rapid expansion of mortgage broker market share.
Power Originator: Why does the media play such a big part in consumer decisions about mortgage lending, when the really important conversations take place between a borrower and potential lender/broker?
Phil Shoemaker: Like it or not, a lot of prospective homebuyers base their decisions on what the media is reporting, no matter how accurate the message is. That’s a big problem when reporters and journalists might not offer up fully sound advice on the topic of mortgages.
Back in April, a segment aired on a national news outlet instructing consumers how to navigate mortgage rate options. That’s a topic that is helpful for potential homebuyers of all ages and walks of life, and it’s admirable to see such effort given to educate consumers—except when the lesson isn’t completely accurate. The report mentioned mortgage brokers, online lenders, and banks, but included the message that “Brokers help you weed through the details, but may charge extra fees.” It also claimed that banks, where consumers are likely to have other accounts, are “more likely to cut you a slightly better deal.” That misinformation creates misunderstanding for consumers around the country.
POW: Surely most news outlets aren’t intentionally misleading. How does this particular example of messaging and misinformation speak to the harm that’s being done on a larger scale?
PS: It gets worse when other reporters piggy-back off of her messaging for their own stories. How can we expect consumers to understand how mortgages work, and how to find the best deals, when their trusted reporters aren’t giving them an iron-clad lesson?
POW: What do you think is the crucial information that borrowers are missing and need to understand before they consider a lender?
PS: Consumers need to understand that mortgage brokers don’t charge extra fees. They don’t require consumers to incur any additional costs that banks and online lenders don’t require – in fact, brokers have much greater access to better pricing and products because they have the ability to shop among so many lenders. The discounted wholesale rates that brokers are able to use, in addition to their lower cost structures, make brokers a great option for consumers.
Consumers also need to understand that the hassle of shopping rates is what independent mortgage brokers do, professionally, day in and day out. Brokers shop lenders on behalf of their customers and help them find the best option that saves them thousands of dollars.
POW: How can we transform the nature of the conversations that we’re currently having around mortgage options in the media at large?
PS: Mortgage brokers do a lot of great things to benefit consumers and simplify the complexities associated with getting a mortgage. Consumers need to understand that. But looking at the issue more closely, it’s clear that reporters for national media outlets are the ones who need the crash course in Mortgage Knowledge first – so they can paint a clear and accurate picture for consumers.