The mortgage broker renaissance

In the wake of the 2008 housing meltdown, mortgage brokers saw their market share plummet. But now brokers are coming back in a big way. With National Mortgage Brokers Day around the corner, MPA sat down with Anthony Casa, chairman of the Association of Independent Mortgage Experts (AIME) to talk about the broker renaissance and what brokers need to do to keep their business growing.

MPA: Brokers’ market share really took a tumble after the financial crisis, but now brokers are having quite a resurgence. What changed?

Anthony Casa: There’s a couple of things. I think the “why” behind it is that we’re seeing – for the very first time – that from a standpoint of execution and the ability to deliver a loan in the same time as retail lenders, brokers are able to deliver that loan just as fast or faster.

But if I had to tell you the single biggest reason that the channel has grown, it’s this: In the last 18 months, we’ve seen the size of the broker channel go from 34,000 loan originators to 41,000 loan originators. Consumers work with loan originators. Originators work with either retail lenders or mortgage brokers. When you take 6,000 people out of the retail channel and put them in the broker channel, that’s impactful. There’s a lot of growth with retail originators coming back into the broker channel.

MPA: So how can brokers keep that trend going?

AC: It’s not easy. One of the initiatives that we took on is trying to convince brokers to say, rather than, ‘Hey, it’s Jon Doe Mortgage Brokers’ – just talking about their own business – to start talking about the channel as a whole. Let’s all say the same thing and bring awareness that brokers are a different option than a retail lender at a bank. Be really visible in your community. Be extremely intentional in your communications on social media. You have to let the customer know that there’s a difference between working with a broker and working with a retail originator. The retail lender works for the bank; the broker works for the consumer.

MPA: Obviously, right now one of the industry’s biggest priorities is capturing millennial buyers. How can brokers convince millennials to do business with them, rather than a retail lender?

AC: The funny thing is, there was a stat that came out earlier this year about millennial purchases. Brokers actually have nearly double the market share with millennials. Millennials are much more cost-sensitive and less emotional when it comes to homebuying than previous generations. That’s the biggest value proposition brokers have. Brokers are going to shop around for the best deal for them. They’re more cost-conservative, and that’s why I see them connecting more with mortgage brokers than retail lenders.

Thursday is National Mortgage Brokers Day. Click here to learn about AIME’s plans to bring awareness to the value propositions offered by mortgage brokers.