Wholesale lending has dropped significantly as a percentage of total mortgage originations. From a high near 70%, wholesale’s share of originations today is less than 10%. Due to the dramatic change in market share many lenders have left the wholesale channel—some temporarily, others likely for good. But in the face of this change some new entrants are staking a claim within this channel. As our economy improves, the housing market will begin to normalize and wholesale’s market share within the mortgage origination industry will grow again. Perhaps never again will it reach previous heights, but a reasonable expectation would be that 30% of all mortgages will be through wholesale lending networks in the future.
This begs the question: What do brokers need/want from their wholesale lending partners? I suggest that there are six qualities that will separate successful brokers in the future from the others: Efficient Operations, Experienced Account Executives, Service Focus, Access to New Products, Competitive Pricing and an Unwavering Commitment to the Wholesale Channel.
Regardless of which wholesale lender you are considering doing business with, you must ascertain their level of commitment to the channel. Brokers cannot afford to spend time and resources working with a lender who may be ”here today and gone tomorrow”.
My firm has recently announced that we are adding 20-30 new experienced Account Executives to further our commitment to our broker partners as we believe the tide is turning for the wholesale channel.
Wholesale mortgage banking is beginning to emerge from the depths of the post-bubble pit. New committed players are emerging that are building efficient, service oriented businesses that will offer access to new products and competitive pricing through experienced Account Executives. Brokers must be diligent in their evaluation of potential partners as the choices made can make the difference between competitive advantage or disadvantage in the market place.
