Plan calls for adding 100 LOs, expanding into commercial and more
Call it the revenge of the Mortgage Nerds. After a recent restructuring, the company is now poised to grow its loan officer ranks, expand its footprint and enter the commercial space more robustly.
“It’s a very easy conversation to get people to convert from retail to broker,” broker/owner Mike Cox told Mortgage Professional America during a telephone interview, noting how the former have higher costs and rates. “It just takes time to get educated and overcome the myths of becoming a broker. I would say it takes sometimes 60 to 90 days for a person to actually figure out what the broker world is and make that transition.”
To that end, Cox said the plan is to add 100 loan officers by year’s end – up from the current 15 – as the company welcomes an influx from the retail channel into wholesale. Having spent 20 years in retail before making the transition into wholesale himself makes Cox uniquely qualified to train others making the switch, he said.
Teaching from experience
“My unique background being in retail for so long and having transparency,” the Mortgage Nerds co-founder said, citing a couple of attributes making him a good trainer for the incoming influx of brokers. “The beautiful thing about being a broker is you see it all. We pay 100% commission to our LOs, and we charge a per-file fee we earn through our process, compliance, all those things – that’s how we were able to restructure.”
In a previous interview last year, Cox described his own transition to wholesale as challenging. “It was daunting to take the leap,” he said. “I was very nervous. There wasn’t a class to sign up to be a broker, at the time anyway.” As he made the transition, he was initially overwhelmed by the vast difference in rates costs, flexibility and other areas between the worlds of retail and wholesale.
It’s all about transparency
The level of transparency found in the wholesale channel doubles as something of a recruitment aid while the company builds on its loan originating ranks. “They know exactly what the company is making,” he said. “When you’re in retail, you have no idea what the company makes. They could be making – and this is not an exaggeration – seven, eight, nine points on the deal and you’re making one point. In the broker world, you know what the owner is making, you know what you make. It’s very transparent.”
The influx comes at a time of greater overall migration from retail to wholesale. According to the Nationwide Multistate Licensing System (NMLS) 6,353 loan officers who left retail in 2021 joined the independent mortgage broker community. In the first nine months of last year, according to NMLS, more than 7,000 loan officers converted from retail to wholesale lending.
Expanding into more states planned, processing unit launched
The company also plans to expand its geographical footprint, from six states in which it’s currently licensed to 20-25 by year’s end, Cox said. Mortgage Nerds also added an office in Tampa, Florida, some 45 days ago that complements Cox’s Appleton, Wisconsin base. Moreover, the company recently launched a processing unit as well.
“We very much believe the process – from start to finish – with the consumer,” Cox said. “We’ve been known for that for a long time. Because of that, we started a third-party processing company called Processing Nerds. It blew up and the demand for that has grown quite a bit.”
The company also has bolstered its lender base, Cox said. “With our growth, we realized we had to involve in our lender set. We had ten or 12 lenders at the beginning of the year, and now we have 50. So we expanded our offerings in non-QM especially, commercial and with Fannie and Freddie products. Now, our loan officers are able to offer literally any scenario you could come up with. And we have a lender that can cover it, which is really cool.”
Want to make your inbox flourish with mortgage-focused news content? Get exclusive interviews, breaking news, industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
