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Of course, it's not just BoA that's losing market share and LOs. Wells Fargo has lost about two dozen top LOs since the start of the pandemic. Many have complained about bureaucratic compliance policies that have tied the hands of entrepreneurial mortgage sales staff, former staffers said.
Several LOs told me that BoA and other large depositories know they can't compete with big IMBs. Instead of shutting down the mortgage departments, they'd rather starve them of resources or integrate mortgage into other operations, the LOs said.
One former Wells Fargo employee said that prior to the financial crisis, it was common to see "comp revision" policies at the Big Banks. It usually prompted an exodus of LOs and/or management, who rotated between JPmorgan Chase, BoA and Wells Fargo, he said. But after the housing crash, top producers realized they didn't need the corporate structure, overlays or red tape that came with it.
"Some smaller federal and regional banks retained talent by offering the security of a salary + commission model," the Michigan-based LO told me. "We also started to see a breakdown in the old school heavy upper management structure. The landscape has changed and it seems like there's a plethora of hybrid retail/P&L models out there that allow the individual LO to control their own margins and compete more efficiently without being saddled by 5 layers of upper management sucking off the profits."
The LO said he could see all the Big Banks adopting a model where they cut out LOs altogether.
"Customers that stay with their bank will fill out an online application or sit down with a personal banker at a branch and then automatically get dumped into a processing center that operates like Quicken on the back side," he said. "The big banks aren't competitive in my market and I don't see them ever changing that."
Hope you all have a great weekend!
James Kleimann
Managing Editor, HousingWire
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