A growing number of brokers have made the switch
The following article is written in association with AIME – the Association of Independent Mortgage Experts.
Those following the mortgage industry closely know there’s been a significant broker migration from retail to wholesale in the last few years. The Association of Independent Mortgage Experts (AIME) has emerged as one of the biggest boosters for the migratory trend, augmenting its endorsement with resources for those making the switch.
Tom Ahles (pictured), president of growth for AIME and broker owner of Edge Home Finance, sat down with Mortgage Professional America to discuss the trend. He broke down the reasons for it, and the role AIME is playing as a growing number of brokers take flight from retail.
“When we talk about the biggest reasons why retail is migrating into wholesale, the largest component is market compression,” he said. “Brokers now have the speed and technology to offer their client a better service than what they’ve ever been able to, due to having quality wholesale partners that allow independent mortgage experts across the country to operate with the same technology if not better than retail originators have but without needing 17 or 18 layers of management above them to be able to originate.”
He invoked his day job to illustrate the dynamic. “At my company, we’re number two or three in the country with about 500 loan officers,” he said. “The majority work at home. That used to be a daunting task, without having the technology or speed to help deliver a referable experience.” This has changed, he said, “due to advances in technology and wholesale partners really going all in and helping brokers across the country.”
Notwithstanding the dizzying pace of technological advancement, the concept is fundamental: “We’re in the business of selling money. As a mortgage professional – whether you designate me as a broker or banker or loan originator – my sole duty is to give my clients a great transaction, and a great transaction relies on interest rate, process, and cost. And right now, wholesale is dominating that.”
He ticked off some of the advantages of securing the services of an independent broker rather than turning to retail. “We’re proven to have a lower interest rate, lower cost, and our speed of service. Right now, it is blowing the doors off retail because they’ve also been forced to lay off a lot of people recently. You’ve read about the mass number of layoffs happening nationwide from retail lenders whereas on the wholesale side, it’s been the opposite.”
Again, he tore a headline from company news: “At least for us, we’ve been growing and you’re starting to see a lot of other companies growing on the wholesale side as well,” he said.
And then there are the cost savings. According to recent data, Ahles said, consumers save an average of $9,400 going the broker route. Ahles said the estimate is based on 2020 data, and more recent estimates show even greater savings. The reason for the savings is rooted in leaner operations than at a retail outfit.
“It’s easier for me to originate a loan at less cost,” Ahles said. “I don’t need a sales manager, I don’t need an area manager, I don’t need a district manager, I don’t need a records manager, I don’t need a lock desk manager. We’re set up to deliver the same thing, which is money, with less hands involved.”
The lean approach is attributable to technology, he said. “Technology has advanced to where you can be the local mortgage expert but utilize the tools of wholesale partners to deliver a better product. And it’s cheaper. The cost of delivering that mortgage is a lot cheaper when you’ve only got one person originating it, and one company delivering the loan.”
The old-school methods with layers of bureaucracy are increasingly anachronistic, Ahles suggested. “It’s like the old office space parlance: What exactly do you do, Peter?”
It all starts with support: “This is where AIME really comes into play,” he said. “For those that are looking to join the broker channel, you do have support. AIME has a mentorship program. We’ve also rolled out a small business grant program, our Spark grant, that is also helping retail originators that are looking to come into the wholesale space either through mentorship or even dollars – we’re giving out a grant for loan originators entering the wholesale space, money to help get started.”
It doesn’t end there: “Also, you have our wholesale lenders that have the same type of support once you come on board,” Ahles said. “United Wholesale Mortgage has a mortgage development center – a whole group of team members that will help with your NMLS (National Multistate Licensing System) compliance. We’ve put all of those partners together through the AIME group profile and opened up a category specifically for retail originators where they can have access to all of our tools.”
It’s all ready to use – something like turnkey, you might say, “We kind of have everything boxed and ready for them, to where prior it was kind of like ‘figure it out on your own and there was no real community to help with questions. Now, as the community that AIME provides, we do have the support. We have the support with not only vendors, but peer to peer.”
