- What's at Stake: Wholesalers who fail to maintain constant communication and updated technology for their broker clients.
- Expert Quote: "Most lenders out there don't have the right system or technology" — Thuan Nguyen, CEO, Loan Factory.Overview bullets generated by AI with editorial review.
With mortgage rates sitting above 7% and originations dwindling, wholesale lenders are in heavy competition for brokers' business. A strong relationship could be the deciding factor."Relationships are probably more important in today's market than they've been for a while, and part of the reason for that is deals are just tougher," said Jeff Leinan, co-president at Plaza Home Mortgage. "If a loan has some challenging aspects to it, they're probably going to the place where they feel most comfortable."
Brokers are looked at as the client in the relationship, and thus the responsibility to maintain it is often on the wholesaler.
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Get your broker-to-account-exec ratio right
Having the appropriate amount of brokers under each account executive at a wholesaler is crucial to ensure lenders provide constant communication and are accessible whenever a broker needs them.
While some lenders may assign a flat number of brokers to every account executive, Newrez looks at the amount of volume originators bring in along with what each account executive on their internal team can handle, Senior Vice President of Wholesale Lending Tony Kottenbrock said.
"We use CoreLogic data to establish what's right for each account executive, and we try not to paint a single picture for what each account executive can handle," he added. "It's based on the strength of the account executive, how many loan officers they are funding with and their scope of ability to handle the amount of business a loan officer assigned to them is doing."
If an account executive performs well, it means they can handle more brokers, and vice versa, Kottenbrock said.
Plaza takes a similar approach, as one size doesn't fit all, Leinan said. Some account executives manage as few as 15 brokers, while others handle 50, which boils down to a combination of volume of individual clients.
NEXA Lending, one of the biggest mortgage brokerages in the country, funnels about 45% of its business to United Wholesale Mortgage because of the attention it provides, NEXA Founder and Executive Partner Mike Kortas said.
"They have over 20 account executives dedicated only to NEXA, calling every single NEXA loan officer every single week," he said. "Other companies don't do that, and when they don't do that, they don't get the business because they're not establishing those relationships."
If other lenders want NEXA's business, they need to commit more account executives, Kortas added.
"If you want to strengthen and build a relationship, you have to have the right amount of support to be able to do that," UWM Chief Growth Officer Desmond Smith said.
Thuan Nguyen, CEO of Loan Factory and the No. 2-ranked broker in the United States last year by Scotsman Guide, agreed with Kortas' stance. Brokers will forget about lenders who don't provide proper attention and constantly remind loan officers they want their business, he said.
Provide education resources
While being on-call is essential, it doesn't provide much value if lenders cannot offer the assistance required.
As a key component of its service, Newrez requires its operations staff to be more knowledgeable than brokers in order to be able to give them advice. The lender regularly educates its staff and offers learning opportunities to brokers, holding more than 50 training webinars.
"They have to do their part in continuing to learn, continuing to improve, and they can't run and hide from problems either," Kottenbrock said. "We're there to help them every step of the way, and wholesalers in general need to be willing to do that to continue to establish long-term relationships."
Plaza also has a learning center for brokers and keeps its internal staff up to date with the current market.
UWM offers training for its broker partners through its Success Track initiative, which brings an average of 1,000 people a week to its Michigan headquarters, and
Constantly update technology
Outdated technology that slows service is one of the quickest ways to kill a relationship with a broker.
Nguyen recommends brokers choose lenders based on their systems to avoid delays and frustration.
"Most lenders out there don't have the right system or technology, and that is why my team has to do things manually every day, and that is not good," he said. "If any lender wants to be successful, upgrading their technology is a must, so that they can close loans faster and the loan officer can be happy. It's important to make the job of the broker a lot easier."
Plaza is constantly surveying the market to see what new technology other lenders are using and what brokers are asking for. The lender is also working on its own artificial intelligence tools, Leinan said.
"We're constantly doing what we can to make sure we're as up to date as you can be in a space that is constantly moving right now," he added. "One of the key components for brokers right now is simplicity and ease."
Because UWM strictly serves brokers, it has 1,800 information technology employees dedicated to serving brokers.
Cater to preferences of the brokers you want to work with
Although brokers are the client, lenders still have a choice in who their strongest, long-term partners are.
Leinan looks at the relationship as a two-way street, saying brokers should respond to great service with more business. When both sides pour into each other, the entire loan process becomes more efficient.
"The more you can work with the same brokers or originators, the easier it gets for everybody," he said. "The more they learn your system, your processes, it becomes more efficient for everybody, costs lower."
Brendan McKay, president of the Broker Action Coalition, also suggests lenders should be more selective in who they work with.
"They would be able to run their business significantly more efficiently," he said. "They should design their operations and their business in a way that caters toward the brokers that they want to be working with."
UWM, which has committed a notable amount of resources to a valued client in NEXA, also supports brokers where needed and prides itself on being flexible, Smith said.
Listen to feedback
The top piece of advice Smith offered was simple: listen.
UWM runs a program, called Broker Brilliant Ideas, that allows loan officers to share their opinion on anything from the lender's products to marketing. Most of UWM's product ideas come from the feedback it receives, Smith said.
Acting on broker feedback to improve their experience is what ultimately builds valuable, long-term relationships.
"You're not always going to be the price leader," Kottenbrock said. "It comes down to service.
