By Matt Joy, Princeton Mortgage
It’s no secret that our industry has compressed as a result of the refi market drying up. We’re in a full-blown purchase market and there are no ifs… ands… or buts about it. Realtor relationships are gold, every borrower is price sensitive, timing and service are CRUCIAL and for Loan Officers and Brokers alike… your comp is being affected… whether you’re a broker and you’ve been reducing comp (going to borrower paid comp or just straight up lowered your lender paid) OR if you’re an LO, your company has probably already “adjusted” your comp structure accordingly. This is because in order to win that purchase business, companies have to be competitively priced and if you’re not… your borrowers will be gobbled up by some local/regional bank who could care less how much they make on the loan because they’re just going to place it in their servicing portfolio and make money collecting the interest payments… phew… AND it’s because companies are having a hard time maintaining expenses with lower volume.
Great… I just explained something we all knew. I can hear you all asking… what’s the point Joy?! Well, I don’t have one… sorry to disappoint, but what I do have is examples of this situation blowing up everywhere. Case and point. Monday, I spoke on the HousingWire piece that reported C2 Financial bailing from Quicken. Then on Tuesday a report came out that said C2 Financial’s LO’s were upset about the departure because they loved using Quicken… and THEN today a report comes out where Jay Farner (Quicken Wholesale’s Head Honcho) starts swinging at UWM for creating what he (Jay) perceives as a mudslinging campaign to smear the name of good wholesalers. Honestly, there hasn’t been this much excitement in the wholesale lending space since the FBI kicked in the doors at Taylor, Bean and Whitaker. Check out the report and see for yourself… this is some HEAVY stuff.
The root of ALL of this though, is what? Say it with me now… refi’s are no longer available. When rates were 3.25% and all you needed was a heartbeat and a license to originate loans… everyone was playing nice. There was enough business to go around for us all and money was being made hand over fist. Welp… the reality of the situation is that those days are longggggg gone. Our market is more competitive than ever, and shots will be taken whenever wherever by whoever. Football is back, so this saying is apropos (said aprəˈpō… I got a little fancy with that word) “keep your head on a swivel”. It shouldn’t be a surprise to anyone that the two (perceivably) largest wholesale lenders in the country are duking it out. Mind you… all of this is happening while large retail lenders are “restructuring” comp plans, down-sizing their operations and finding new ways to attract first-time home buyers. It’s aggressive out there and some would say, that the new kids on the block (cough… cough I’m talking about us) might be the safer place to be right now.
I’ll keep watching the industry for ya… as I think we’ll see things continue to heat up as we enter Pumpkin Spice Latte season (yaaaass).
Talk to you soon!
MJ
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.