Ocean Mortgage 2020 Newsletter 006

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Retail banks are winning – for now. But CoreLogic, an independent financial analytics company, recently reported that mortgage brokers’ share of conventional mortgages rose to 16% in 2019 – more than double the low of 7% after the Housing Crisis in 2011.

This is more than a trend, because at the end of Q1-2020, broker market share was 21.6% – the highest in 10 years (according to United Wholesale Mortgage, the largest wholesale lender in the country).

What’s more, several lenders who elected to stop accepting loans from mortgage brokers during the Housing Crisis – are still not taking loans from brokers. This means that wholesale lenders (who only work with mortgage brokers) are winning a material amount of residential mortgage business from consumers over retail and community banks.

Why? Ask the retail bankers who are becoming mortgage brokers… Bankers can only market their own in-house loan products, and, according to salary.com and payscale.com, they make less money than mortgage brokers!

Also, because independent mortgage brokers work exclusively on mortgages, and with a wide variety of capital sources, they are experts at:

  • matching clients with a much larger number of competitive mortgage products
  • providing faster help to all borrowers, including those who are self-employed and part-time
  • guiding first-time homebuyers and those with less than stellar credit histories
The Association of Independent Mortgage Experts reported that one out of three millennial first-time homebuyers now prefer to use a mortgage broker. From the research performed by these millennials, they concluded that brokers provide more savings, expediency, and personalized service, with no fees.

Here’s the Point: "Consumers are realizing that big, popular retail banks doing a lot of advertising (with their name in bright lights on corner buildings) are not necessarily the better alternative for a mortgage."

Mike Kanuka, Founder & President

NMLS #901949 (Company)
NMLS #880882 (Individual)

Equal Housing Opportunity