A fractured wholesale channel has narrowed the options available to homebuyers
The wholesale channel has long sold itself on a core promise: access. Brokers represent dozens of lenders, shop the whole market on a borrower's behalf, and deliver options that a retail bank cannot match. But one fintech executive who spent years originating loans before building technology for the space says some barriers make that challenging for brokers.
The fragmentation of the wholesale channel has narrowed what brokers can actually offer. Platforms do not talk to each other, the largest wholesale lenders have created exclusive relationships that force brokers to choose sides, and the pricing a broker sees depends heavily on how much volume they do with a given lender.
Benjamin Schieken, founder and CEO of Fincast, Inc., said the borrower ends up paying the price for all of it.
"I think some of the things that have happened in the broker world is like this divisiveness from a lending relationship perspective, from a wholesale relationship perspective, that has actually been really bad for the borrower," Schieken told Mortgage Professional America. "Many borrowers believe that a broker is going to shop on their behalf, and they're going to have a really strong representation in the market.
“But the truth is that in the last five years, many brokers only have a fraction of the products and options available to a consumer at any given time."
The UWM-Rocket divide
Schieken believes the standoff between United Wholesale Mortgage (UWM) and Rocket is the most visible piece of it. The feud between the two largest wholesale lenders in the country has made it impossible for a broker to work with both. A broker who submits to one is effectively locked out of the other, which means any given broker is starting with less than the full market before a single file is opened.
The pricing fragmentation compounds things further. Schieken believes the practical reality of working across multiple platforms has pushed many brokers toward using fewer of them.
"You have to log in to Pylon to get pricing there. You have to log in to ARIVE to get certain pricing there. You have to log in to Loansifter to get other pricing there," he said. "After a certain point, you just start to log into one. You don't look at everything. And that's totally understandable because it's a lot of time and it's a pain in the butt."
The result, Schieken said, is that borrowers end up with a filtered view of the market rather than the full one they thought they were getting.
"If you ask any broker, how many different lenders are you actually sending files to that you're actually producing pricing from? It's minimal," he said.
The compensation structure adds another layer. Schieken said brokers who handle more volume with a given lender get better rates than those who handle less. He believes that puts individual brokers in a difficult position when trying to deliver truly competitive options across the board.
How brokers can help
Schieken believes structural pressures brokers face have pushed many toward a volume-first model, not necessarily by choice but because the economics of the business reward it. Working at that volume while building real client relationships is a hard balance to strike, he said.
For brokers who want to be genuine advocates, Schieken said the starting point is access, being able to show a borrower the full picture rather than a curated slice of it.
"If you can be a true surveyor of the market and you can help a borrower, you can be an entry point to more options than the borrower can get from shopping more brokers," he said. "You'll be valuable to a borrower."
Specialization is another path. He pointed to the wave of new wealth being created through AI-company equity, a generation of prospective buyers who are asset-rich but whose income does not fit standard qualification models. Brokers who learn to serve that segment can build something difficult to replicate.
Schieken said Fincast is working on infrastructure that consolidates lender pricing and connects it to the AI platforms where consumers already research mortgage options, intending to deliver real, personalized offers without manually logging into a dozen different systems.
"How do you create transparency? How do you show the bad with the good, so the borrower understands the difference?" Schieken said. "If you can be a true surveyor of the market, you'll be valuable."
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