Hello, LOs!
Executives from wholesale lenders, such as United Wholesale Mortgage and Homepoint, claim a transition period has started, with retail LOs migrating to broker shops amid higher mortgage rates and lower volumes.
LOs started to look for new opportunities as refi leads dried up, Mat Ishbia, chairman and CEO of UWM, told analysts Tuesday.
"They say: Why are these brokers making more money and offering better rates with better technology than I have? And so they start to migrate and have those conversations."
The migration started before the COVID-19 pandemic, in 2018, but was interrupted by the recent refi boom, according to Phil Shoemaker, president of originations at Homepoint.
"When originators have full pipelines, they're just kind of dealing with it, but the minute their pipeline starts to dwindle, the cost difference between the retail and broker channels really starts to become apparent and important."
Ishbia and Shoemaker, of course, maintain brokers are better. But migrating from one channel to another is not that simple. Aspects such as back-office structure, non-compete contracts, and compensation packages need to be considered.
Based on that, how are broker shops and lenders approaching LOs, regarding compensation, work structure, and contracts? Please share your thoughts with me at flavia@hwmedia.com.
Flávia Furlan Nunes
Mortgage reporter HousingWire
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