At the heart of the debate is this key question: Who will win the market share race as we turn to the next decade of mortgage lending?

Let the competition begin!

Round 1: Opening Bell

Roque: Brokers are bad; they are unruly, terrible, difficult to control, noncompliant, and simply terrible mortgage professionals. They caused the ’08 market crash, they don’t follow rules, they are small for a reason, and they don’t have control of the process.

They send all the risk to any number of wholesale lenders; they can’t communicate with underwriters, and are completely held hostage to third party companies for underwriting, closing, funding, etc. You lose all control working with a broker. It is a terrible business model that is destined to be only a small segment of all mortgage originations. Would you rather close one in four loans or three out of five? You tell me. Working for a mortgage broker or, worse yet, receiving loans from a mortgage broker is taking market risks you don’t want to take.

duPont: Look, let me outline the mortgage industry’s version of “old money versus new money.” Picture this: it’s the early 2000s, and mortgage brokers are absolutely crushing it. We’re talking about nearly 60% market share in 2008. Brokers were the cool kids on the block, the scrappy entrepreneurs who could shop around and get borrowers the best deals. Every major bank had a wholesale division, because, frankly, they needed us.

Then came The Crash.

Round 2: Brokers Are Embattled

Roque: Yes — The Crash. I managed many of those mortgage brokers, so yeah, I remember. I was on the senior leadership team at Calyx Software from 2007-2009. There wasn’t a mortgage company with over 50 loan officers that I didn’t have a relationship with, and they were mostly brokers. I flew coast to coast, speaking at mortgage conferences on market trends — sometimes 30-40 conferences a year. Why? Because 70% of mortgage professionals used my product, Calylx Point.

I grew up as a mortgage broker; I loved the community. In the 1990’s my father ran a mortgage brokerage and real estate company. It mirrored many family-run companies: Mom ran the administration, Dad ran sales, and we all did odd jobs for them. It was a company not all that dissimilar to thousands of mortgage broker shops across the country.

The mortgage industry was, by and large, local and family-owned — you did loans for your neighbors. You knew your market: local employers and all local realtors. It was a tight-knit community, with vibrant state associations fighting for their local interests. The National Association of Mortgage Brokers (NAMB) was powerful in DC, working alongside the National Association of Realtors (NAR), lobbying for our industry to sell more homes and to originate more deals.

But then, brokers became the disappointing reflection of a culture and decade of greed.

duPont: But were they really, though? The 2008 financial crisis hit like a meteor, and guess who got blamed first? That’s right, the brokers. Never mind that we were the middlemen, simply connecting borrowers with lenders and the lending products that were available on the market. The same products that Wall Street investors demanded with an insatiable appetite; new products were created, and brokers simply sold what was later securitized.

Round 3: Brokers Counter Punch — Homeownership, A U.S. Priority

Roque: Interesting points. Perhaps it is worth reviewing what unfolded back then, and in the process, shedding some light on what really happened. Let me explain …

In the late 1990s, products were introduced to meet newly defined minority housing initiatives by Franklin Reins and Fannie Mae. These initiatives were well intentioned but poorly implemented. Predicated on home appreciation, driven by single family inventory levels, and benefiting from a booming Clinton economy, they were introduced hastily and without regard to longer-term consequences to the housing market.

Countrywide, Indymac, New Century, ABNAmro, WaMu, rolled out Option Arms, Ninja loans, subprime 2/28 and 3/27 ARMs, Stated Income, and 100% CLTV loans — with Lehman, Merrill, and Bear Stearns as the largest aggregators and securitizers of these products.

Once the largest sales distributors (e.g. brokers) had these products, it was like injecting a poison into the blood stream. The products made their way throughout the arteries of America’s housing markets one broker at a time. The desire to scale quickly gave rise to Citrix, which enabled Calyx Point to be installed once and then shared across thousands of loan officers. As a result, the evolving mortgage origination landscape grew far beyond any regulatory ability to oversee it.

Countless people jumped into the mortgage industry to get in on the action. The barrier to entry was low, product appetite high, and inventory plenty; without much product or mortgage education and no licensing requirements, loan officers could make $500K or $1M with relative ease.

With this elixir of market, technology, and product components, mortgage brokers were set up to fail. And they did, in wild fashion.

It was like watching a herd of buffalo running straight off a cliff. The only difference was, it was done in the dark — because no one knew where the cliff was. We sensed it; we knew it would come. But the money was too great, and the competitive landscape was too fierce, to stop the momentum behind the herd.

The Implode-O-Meter was on everyone’ desktops. We watched large mortgage broker platforms, correspondent lenders, and wholesale lenders close on a daily basis. It was emotional, angering, fear driven, and surreal. There was a coliseum and gladiator-like attitude of seeing mortgage companies fail — the shock, the horror, and the cheering. It is difficult to describe, but we see remnants of this today with rumors of a company being promulgated by recruiters with the hope of causing panic and collapse. We hate to see companies fail, but we also kind of enjoy it. It is a paradox of human professionalism: the same attitudes and practices that we all condemn, most of us also participate in.

But, the damage was done. Brokers were framed for a crime they didn’t commit.

duPont: Exactly. The narrative became “brokers caused the crisis,” and faster than you could say “Dodd-Frank,” banks shuttered their wholesale divisions left and right. Wells Fargo, once a major wholesale player, completely exited the channel in 2012. It was brutal.

Roque: Yeah, it was brutal. We were losing Calyx users across the US — our clients were closing down. But at this moment in market history, I was contacted by Jonathan Corr, President of Ellie Mae. That’s when the secret plan to reshape the industry was emerging. Brokers didn’t have a chance; they had to become a mortgage banker or “die.”

Round 4: Brokers On The Ropes — Reshaping Of The U.S. Origination Market

Roque: In 2010, I flew into Oakland Airport and drove to Ellie Mae headquarters. Since everyone knew who I was — I represented Calyx customers and 70% of originators — to avoid Ellie Mae Sales reps from noticing that I was in the building, Jonathan and Sig ushered me into a private conference room. We met for several hours, hatching a plan to drive the greatest migration of Calyx users and mortgage brokers over to Ellie Mae’s Encompass Banking customers.

From 2010 to 2014, we traveled across the country, stopping in every major city, meeting with mortgage brokers. The market and regulatory changes were providing enough market confusion to put us in the position to help others see it more clearly.

In 2010, Dodd-Frank gave us plenty to talk about.

Dodd-Frank gave rise to the CFPB, which centralized federal oversight of mortgage originators, brokers, and lenders. Rules like Ability-to-Repay (ATR) and Qualified Mortgage (QM) soon followed, raising underwriting standards and shifting liability risk onto originators. With these added burdens, detailed Loan Originator Compensation Rules ended yield spread premiums (YSPs), severely limiting broker compensation models. As a result, in early 2011 lenders scrambled to convert LOs from 1099 to W-2, restructure comp plans, and install compliance checks.

The net result of these regulatory adjustments was that brokers lost pricing flexibility and risked non-compliance. Mortgage banks, with in-house compliance/legal infrastructure, thrived.

So what was our pitch to brokers?

• Brokers weren’t compliant.
• Brokers didn’t have control of the process.
• Brokers had to disclose yield spread.
• Brokers were now capped at what they could make.
• Regulators didn’t like brokers.
• Brokers can’t control when their files will get underwritten.
• Brokers were the punchline of every mortgage joke.

And to small mortgage banks?

• The cost of compliance is too great to be competitive.
• Personal liabilities are significant.
• The cost of technology, scale, compliance, and infrastructure are too large.
• The back office underwriting, closing, and funding costs are growing too complex and costly, so why not leverage an enterprise mortgage banking platform (Ellie Mae)?

These talking points worked. By 2013, the mortgage broker market share had collapsed to 5%.

With these efforts, the great migration took place, and with this momentum, on April 14, 2011, Ellie Mae went public, and the mortgage lending market shifted for the next 15 years. It was a rush to market share for Ellie Mae and for mortgage banks along with it. With the regulatory winds, the pendulum swung to depositories and non-depository mortgage banks. Brokers were put on the defensive for nearly a decade.

duPont: It was a real challenge. For 15 years, Realtors have been well-trained not to trust brokers.

Roque: True. Based on this, IMBs have locked up real estate brokers and builders, with MSAs and joint ventures. This is why the majority of mortgages are originated by mortgage bankers in the United States.

Between 2010-2015, the mortgage banking and depository market share hovered around 90%. To put this in perspective, prior to The Great Recession of 2008, the mortgage banking market share hovered around 30%. Thanks to a new regulatory environment, evolving technology, and aggressive recruiting strategies, origination production consolidated around mortgage bankers.

But what has happened since?

Round 5: Brokers Rebound Amidst Margin Compression

duPont: Ok, ok — are you done yet? Thanks for taking advantage of the market opportunity, Mr. Mortgage Banker. But here’s the thing about us brokers — we’re survivors. We’re resilient. While the IMBs were busy building their corporate towers and adding layers of middle management, we were quietly rebuilding, adapting, and preparing for our comeback.

And boy did brokers make a comeback. The market dynamics began to swing, creating friction for mortgage banks in the form of margin compression and economic rate increases.

The mortgage market witnessed systemic shifts in 2013, 2018, and 2023. Sudden jumps in rates, increased compliance and operating costs, and competitive broker dynamics created tremendous pressure on non-servicer mortgage lenders. These market events drove non-bank lenders to explore mergers and acquisitions, which peaked in 2018–2019.

This is where brokers began to gain momentum. What was our “secret sauce”? Technology became the great equalizer. All those advantages the IMBs had — the in-house underwriters, the complex and costly systems, the corporate infrastructure — technology leveled that playing field faster than IMBs could keep up. Suddenly, a broker in a home office could offer the same digital experience as a bank with thousands of employees. And with this, brokers gained market momentum.

Round 6: Mortgage Bankers Lose Ground — The Rise Of Wholesale

Roque: The resurgence of wholesale/broker mortgage lending since 2010 — especially post-2016 — is one of the more fascinating market comebacks in U.S. housing finance history. The emergence has been driven by capital markets evolution, tech enablement, and good market leadership.

Given regulatory changes and the flight to mortgage banking, Wells, BofA and Citi pulled out of the wholesale channel; subsequently, the market share dropped to around 5% between 2012–2014. In 2015–2017, Flagstar, Caliber, and Home Point — and later Stearns in 2022 — all buckled under poor leadership and competitive pressures, and exited as a result; Stearns laid off hundreds of employees post-COVID. These players were simply being outmaneuvered by the two remaining players: UWM and Rocket.

As major players ran away from wholesale, UWM in particular saw an opportunity to build a wholesale-first model that was leaner, more compliance-aware, and hungry to rebuild the channel. Their growth was impressively annoying and it caught many of us off guard within the retail mortgage banking community. UWM’s growth was organic, grassroots, and relationship-driven, with brokers located across the country. Ishbia’s focus was to provide best in class turn times and service levels, as well as provide software tools and other services to help brokers get set up and grow.

By 2018, UWM wasn’t just a champion of the broker channel, it was building it up. As a result, thousands of mortgage brokers were established from loan officers leaving large, big box mortgage lenders struggling with margin compression, price competition, and a declining-to-flat market.

duPont: Exactly. NEXA was started in 2017 on the heels of this market momentum. We were built on the broker’s promise of transparency, sharing the purchase advice to loan officers. You mortgage banks can’t be transparent — corporate margins are locked away tighter than Fort Knox. Yes, you are very profitable, but at the expense of whom? The loan officers and their compensation. Great for owners and middle managers — and terrible for loan officers.

Round 7: UWM’s Punch Is Powerful — Retail On The Ropes

Roque: Well, compliance and marketing are real costs, something each of us on the mortgage banking side needs to support. We don’t have the luxury of relying upon a central lender to provide that to us; you need margin to pay for that.

I have to admit, though, individual mortgage banks have struggled to balance high compliance and technology costs in a higher rate environment and with thinner margins due to your broker price pressures.

In 2017–2019, the market hovered at or below $2T in originations, frustrating IMB efforts to scale. During this time, the mortgage market grew increasingly competitive, one that largely favored brokers.

UWM thrived due to its investment in tech, broker-related services, and a model that leveraged its costs across tens of thousands of brokers all over the U.S. Technology investments became the driver for greater transparency with rates and fees. Companies like Zillow and LendingTree fed the rate-board, low margin, low cost narrative.

It wasn’t long before consumers began asking the key question: Can I get this cheaper somewhere else?

Brokers could plug into UWM’s wholesale platform, and — with a consolidated vision — benefit from a CRM, LOS, PPE, and advanced closing features that bridged the gap between the traditional broker and wholesale lender experiences.

With these efforts, the wholesale market share began to rise behind lower costs, tech driven fast turn times, and broker autonomy.

duPont: Once the infrastructural grounds were laid, the moment for the market to scale had arrived. A war cry for brokers was born, one that put lenders on notice: Brokers Are Better. We at NEXA added thousands of loan officers as a result, and this gave rise to larger brokers who would later expand into the non-delegated correspondent channel, with UWM as the largest fulfillment provider.

Roque: I hated that slogan. I mean, the audacity to say that when we were doing nearly 60% of all originations.

Round 8: UWM Creates A War Cry — Retail Takes Punches And Loses Ground

duPont: When I started in this business back in 1996, being a broker meant everything was paper and fax machines. I’m talking about literally making three copies of a Good Faith Estimate by hand. Loan officers had to physically drive to meet with underwriters, and if you were a broker, you’d send your loan off to a lender and pray that the underwriter would take your call when you had questions.

IMBs had the advantage because underwriters were in their office and under their control. Loan Officers could walk down the hall to explain conditions or circumstances; meanwhile, brokers were stuck playing phone tag. Until UWM came along, it was like bringing a knife to a gun fight. UWM’s technology changed everything, eliminating these advantages, making the Brokers are Better war cry feasible.

Mat Ishbia launched the attack. It was loud, impolite, and a direct snub to traditional independent mortgage banks. Everyone took notice.

Social media lit up and the grassroots impact was palpable. Behind the scenes, the Mortgage Bankers Association fumed at the rhetoric, but it was a rallying cry for loan officers who felt pinned between market pressures on rates and corporate pressures on loan officer compensation. With the dominant market share expansion by mortgage banks, bloated layers of management, bureaucratic processes that translate into poor service levels to field loan officers, and overlays of overrides came with it.

Becoming a broker held the promise of autonomy, better comp, and localized branding. Price was a primary driver to gain market share, as it drove retail mortgage loan officers into the broker channel, and it undermined the economics of other wholesale lenders, with several like Fairway, Loandepot, US Bank, and Citizens Bank exiting the channel. As a result of such market maneuvers, broker competitiveness was undeniable; they were frequently more price competitive than corresponding mortgage banking or consumer direct platforms.

Round 9: Brokers Pace Themselves In The Ring With “Brokers Are Best” — Retail Continues To Lose Momentum

duPont: As the wholesale market normalized around technology and pricing, the landscape migrated to Brokers Are Best. There was a maturity in the wholesale lending vertical, adopting a tone aimed at rebuilding trust in the broker community after the 2008 crash and distinguishing brokers from retail lenders.

But the “better” transition was leveraged to position brokers against lenders such as Cross Country, Loan Depot, and Movement.

Roque: With the growth of UWM’s broker and fulfillment volume, it is hard to deny that they haven’t been successful.

In 2022, UWM and Mat Ishbia began using Brokers Are Best messaging in speeches and digital assets, signifying a visible shift in new campaigns, moving from proving the channel to simply owning a declared sense of superiority.

The market evolution has also applied pressure on mortgage banks to become leaner. This market moment gave rise to companies like NFM Lending, Canopy Mortgage, and Geneva Financial — organizations that have limited middle management, leaner infrastructure, and efficiencies driven by outsourcing and technology-driven AI solutions. These innovations yield better consumer pricing, loan officer compensation, and a more competitive alignment, while competing with broker-related options available in the marketplace.

Round 10: Retail Gains Strength & A Second Wind That Didn’t Last Long

Roque: The COVID production boom of 2020–2022 gave mortgage banks a reprieve, but rates soon returned to normative levels between 6–7.5%, driving many small to mid-sized mortgage banks to return to the struggle they experienced in 2018–2019. Such market dynamics perpetuated the pressures on these smaller mortgage lenders, who were unable to compete with the broker price pressures and the large capital and servicing foundations of larger enterprise mortgage banks.

Among the top 183 non-depository lenders, 27 are separate mortgage lenders whose non-delegated correspondent relationship with UWM makes them as flexible as a broker but with greater underwriting risk management — just like their Independent Mortgage Banking peers.

duPont: This flexibility extends to how we operate at NEXA as well. We don’t have the bureaucratic or back office constraints that bog down many IMBs. When market conditions change, new programs become available, or if we need to pivot our strategy, we can move at the speed of business rather than the speed of corporate committees. Agility wins.

Round 11: Brokers Are Finishing Strong …

Roque: Are brokers better? It is too simple of a statement. Is mortgage lending better with a strong broker channel? Yes. With appropriate price pressures driven by alternatives in the market, mortgage banks have had to become leaner, more efficient, and to deliver more value to their loan officers and consumers. While this will likely drive consolidation in the mortgage banking segment, it delivers the best and most cost-effective sequence of options to consumers.

So, are mortgage brokers as bad as I once championed back in 2010? Not even close — honestly, it was never true. I believe this narrative was crafted out of haste, driven by the same market over-reaction that underwrote much of the Dodd-Frank legislation, with key aspects revolving around broker and loan officer compensation under review today.

duPont: Some of the best mortgage professionals operate within the broker and mortgage banking channels. The one key takeaway from this evolution: when dealing with a mortgage professional, the consumer is far better off today than they were 15 years ago.

There is no question that is true. Mortgage professionals are better qualified, more knowledgeable, and empowered with better options than ever before. We have loan officers from banks, mortgage bankers, and mortgage brokers to thank for the continued evolution of the U.S. mortgage industry.

Round 12: … But Retail Still Holds Steady

Roque: Retail Independent Mortgage Banks still originate the largest single slice of loans: 48.5% in Q1 2025, marking the third straight quarter under 50% but still in the lead position. But the reality is, the broker segment is not just ‘back,’ but they are a real threat to the traditional mortgage banking models that grew since the great recession of 2008.

After bottoming near 5% post-crisis, brokers have surged, evolved, and matured to ~19.1% for full-year 2024, with quarterly peaks touching ~26.6%. Meanwhile, if you zoom out by lender type, IMBs (nonbanks) control originations, proof that scale and execution still matter — but intermixed with that “Nonbank” number are many of the largest nonbank mortgage companies that work closely with UWM and Rocket, illustrating the maturity of the broker/Non-Delegated correspondent channel. NEXA is one of the largest mortgage lenders in the country without employing a single underwriter while “banking” the majority of its loans.

Again, such a picture paints strength in the mortgage banking channel, but maturity and growth amidst the wholesale vertical is rapidly evolving.

The Final Round Ends.

So, who wins the Fight of the Century?

The (market) judges huddle and compare fight cards …

The Verdict From Ring Side:

Mortgage Bankers had an edge going into this fight, but it ends in a draw, inspiring praise and condemnation.

Who will win the rematch? Retail lenders won based on consistency and infrastructure; wholesale won on energy and momentum. But the two are becoming very evenly matched.

Brokers are landing cleaner shots every round (market quarter), and taking more and more market share from mortgage banks due to price, speed, autonomy, and new technologies. Such advancements are forcing every lender to level up.

After the bell rings, the gloves stay up, a technical verdict highlighting the strong offense of Mortgage Banks, but one thing remains clear:

Brokers are back and may take the fight one day soon …