Brokers continue to flee from “Whole-tail” lenders, while paychecks are getting smaller… wait, what?
Updated: Aug 16, 2018
By Matt Joy, Princeton Mortgage
There has been a large movement happening inside of the Wholesale Lending space and if you haven’t been following the BRAWL Movement (Brokers Rallying Against Whole-tail Lenders) …let me catch you up to speed. Late last year, mortgage brokers took arms against wholesale lenders who were stealing their customers. If you happen to follow any brokers on LinkedIn, you’ll find some pretty amazing videos of them tearing up their contracts with alleged “Whole-tail” lenders. Well… it looks like one of the largest brokers in the US… C2 Financial, is joining the movement and terminating their relationship with Quicken Loans.
Now, this isn’t 100% confirmed (I’m just reporting on what’s being reported… yea that works), but in memo to Quicken Loans… the GM of C2 claims that their borrowers are not being sent back to them when a refinance is requested. This is a big no-no in the wholesale space considering that the refi market is as dry as wheat toast. Brokers feel strongly about maintaining those borrower relationships as their business model is propped up on referrals. Every borrower, lead, referral, realtor…etc. is gold to a broker and not having that recapture opportunity is devastating. It’ll be interesting to see other brokers tear up their contracts and move to other lenders… speaking of which, Princeton Mortgage Wholesale supports the BRAWL movement and will do everything in our power to help you maintain your relationships (shameless plug… I had too).
Okay, lets move on to other topics. One of my favorite broker shops out of NJ shared a report with me on Saturday morning that he’s been following for quite some time. We’re seeing a large decline in wages for American Workers despite other areas of the economy doing well. According to the Labor Department, hourly and weekly earnings dipped when factoring in the cost of living increase across the country. It’s an interesting topic, because as technology continues to improve across all facets of industry… is the need for manual laborers decreasing? Think about the mortgage industry… we’re continuously working to create technology that eliminates the need for human contact with the loan origination process. It’s not like we cracked the code on creating technology… it’s happening everywhere. My thought is we’re going to see more and more of this as time rolls on. This could possibly be an underlying issue with our economy’s growth as those with real buying power are not receiving enough money to buy… anything. We’ll have to wait and see.
The 10-year is back down to a more palatable level to start the week at 2.884, Wells Fargo is still under the gun for their foreclosures woes, Millennials could care less about buying homes, and Zillow keeps getting burned after they announced their move into mortgages.
Lot’s of stuff is happening in the industry right now and it’ll be fun to watch over the coming months. We’ll keep you up to date and make sure we cut out all of the boring stuff in the process!
Talk to you soon!
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.
Photo by Joshua Ness on Unsplash