Executive says a tough market means lenders must push just as hard as their partners to help them win
As mortgage rates have continued to rise this fall, many of the nation’s top lenders have added new programs and incentives to help brokers compete in a tougher market.
Economic forecasts for this year called for slowly declining rates, but after an early-year rate drop that moved rates into the high 5s, geopolitical issues pushed bond yields higher, and mortgage rates followed.
Rocket Pro, the broker-facing division of Rocket Mortgage, is the latest to announce a new program hoping to help its brokers get more deals closed. It is announcing a new partner rewards program on Tuesday called Orbit, a program six months in the making.
Austin Niemiec (pictured top), chief revenue officer at Rocket Pro, said the company is hoping these new benefits will help brokers who are finding more roadblocks due to the elevated rate environment.
"It's a tough market out there," Niemiec told Mortgage Professional America. "Brokers are working hard to grow their business, to build their business, and to win business. And we as a lender need to work just as hard on that relationship to help them win."
Protecting against EPOs
Freddie Mac's 30-year average reached 7.28% last week, the highest since November 2023 and up from 7.03% the week before and 6.34% a year earlier.
While bond yields retreated early Tuesday thanks to lower oil prices, the 10-year Treasury yield has been approaching levels not seen in nearly 25 years. While Freddie Mac’s rate remains in the lower 7s, other lenders have been posting rates above 7.5% over the last couple of weeks.
With rates elevated and with an entire industry hopeful for rate relief at some point in the future, one concern is the impact of early payoff (EPO) charges when someone refis shortly after closing a loan.
Niemiec said the possibility of a future refi wave and the added consequence of EPO charges rising led the company to address them in its new program.
"When rates dip, obviously we're going to see a ton of refinance activity," he said. "We saw just even in February and March, that glimpse of a 50-bps reduction, we saw tremendous refi activity, and there was a lot of EPOs in the industry. And still, even in a rising rate environment, there are EPOs for various reasons."
Another topic heating up in the LO community is a migration of originators from the retail to wholesale space. Jonathon Haddad, chairman and CEO of the Association of Independent Mortgage Experts (AIME) noted in his Fuse keynote speech that nearly 1,900 IMB loan officers moved to the broker channel.
Orbit includes a team that connects transitioning and newly licensed loan officers with participating brokers in their states. Niemiec said new originators are still entering the business even in a challenging market.
"It's an interesting time if you study what's happening with LOs across the industry," Niemiec said. "There's a lot of movement, a lot of migration. Sometimes when the market gets tough, people are looking for a change and looking for a platform that'll help them win in a different market. But you'd be surprised, there's a lot of folks still joining this industry even in a tough market, thousands a month."
Focus on controllables
Niemiec said Orbit is built around what partners already do, rather than adding on additional requirements above and beyond a broker’s normal work.
"Most rewards programs out there ask you to do more stuff to earn in, and a lot of it's busywork, like watching videos or traveling or doing a song and a dance," he said. "Orbit rewards the work that actually matters. It's also not just for the big mega brokers like a lot of these things. There are thousands of small brokerages out there that can be incredible partners."
Rocket Pro also reset a credit for loans tied to Compass agents to 20 basis points and extended it through the end of the year, Niemiec said. The credit, introduced in February, had been set to expire and now stacks on top of how the company prices loans for brokers across the board.
"The feedback from the broker community in general is they just want consistent, aggressive pricing," he said. "There's all these lenders out there running all these time-bound offers that are kind of complicated."
Orbit is the latest in a run of monthly announcements to brokers that Niemiec said Rocket Pro committed to in February. He said Rocket Pro has put out something new every month since and plans to keep doing so.
"There's a lot of people winning out there right now, and there's some that aren't," he said. "Brokers that are winning out there are focusing on what they can control."
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