A market shift has also seen brokers adjust their ways of doing business
It’s no secret that the US mortgage market has seen a noted cooldown in recent years, with rising interest rates and an affordability crunch helping slow purchase and refinance activity and requiring a significant shift in brokers’ approach to their roles.
When prospective buyers were rushing into the market during the days of rock-bottom interest rates throughout the COVID-19 pandemic, mortgage professionals were faced with an often-daunting wave of clients seeking a new mortgage or rate.
Those client relationships remain critical – but effective connections with referral partners are equally as important in the current climate, according to a Miami-Fort Lauderdale-based broker.
Kurt Brandly (pictured top), president at Greenside Capital, told Mortgage Professional America that maintaining those lines of communication had been crucial to his approach since returning to the industry after a year off. “Especially in 2020, 2021, even most of 2022, it was all about talking to as many clients as you possibly can because so many people needed help,” he said.
“There were so many applications coming in. The mortgage industry was essentially at its full capacity. And now it’s more about the relationships that you form, especially when it comes to realtors, with banks, even title companies, with your processor. How many people you can help is dictated by your network, and that has been extremely important and a different type of experience I’ve had since I’ve been back in the industry after a year off.”
Realtor relationships have come into sharp focus recently thanks to the highly publicized, multimillion-dollar National Association of Realtors (NAR) settlement, which paved the way for sweeping changes to the way those real estate professionals operate.
New rules are set to come into effect on August 17, retooling realtors’ compensation arrangements in an adjustment some believe could see realtors begin to drift away from the profession.
Brandly, though, said realtor relationships will remain a significant asset for brokers regardless of the coming changes. “Realtors are always our best partners,” he said. “I think you have to look at realtors and realize that we all have the same common goal – so of course, this settlement is going to change things, but at the end of the day we’re all working together for our clients.
“It may have shifted focus on how to do what we do but at the end of the day we’re still doing the same thing, and those relationships are always very valuable.”
Where is activity strong in the US mortgage market?
Purchase activity may be substantially down over the market boom of 2020 and 2021 – but that’s not to say business isn’t coming the door, with Brandly describing a busy year for various loan types.
Non-QM has been one of the spaces that’s seen a “pretty good uptick” to date in 2024, he said, while the fix-and-flip sector is showing glimmers of potential despite overall milder activity. “It’s cooled down a little bit,” Brandly said of fix-and-flip. “There have been fewer builder permits overall in the market.
“But there’s still definitely opportunity out there for people in the right markets. Some of them are definitely oversaturated but if we look in the Detroit area and Pennsylvania, there’s still a lot of people that are doing them.”
What will change with the coming NAR adjustment?
The NAR controversy arose through lawsuits claiming a standard practice in the real estate industry – the charging of a fee to be shared with the buyer’s agent – breached antitrust laws, despite NAR’s claim that commissions were negotiable.
In light of the recent NAR settlement, are consumer-direct models the future for mortgage brokers? Amir Nurani of Left Coast Leaders discusses the potential shift away from realtor partnerships and the importance of building a consumer-direct approach. https://t.co/UrRCwywj1N
— Mortgage Professional America Magazine (@MPAMagazineUS) August 14, 2024
Impending changes as a result of the subsequent $418 million settlement have left the mortgage industry pondering how those may impact realtors’ role in the real estate process.
From August 17, multiple listing services will no longer be able to include agents’ compensations, with buyers’ agents instead to discuss their compensation directly with clients upfront.
That means a written buyer agreement will be required between agent and possible homebuyer before proceeding with a property viewing, with the goal of making it clear to the prospective buyer that they bear responsibility for paying a realtor if the cost is not covered by the seller.
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