Broker says mortgage pros need to dial into their own business instead of heaping blame on others
When mortgage brokers lose out on business, it’s tempting to point the finger at counterparts in the retail space and blame them or their practices for landing a client.
But that’s often too simplistic a conclusion, according to a prominent Maryland-based broker who says recycling the brokers-vs-retail narrative isn’t helpful as a way to overcome current market challenges.
The quieter mortgage market of recent years compared with the boom witnessed during the pandemic doesn’t necessarily mean competition between brokers and retail loan officers is fiercer, Brendan McKay (pictured top) of McKay Mortgage Company told Mortgage Professional America.
Still, a slower pace of business could be giving brokers more time to dwell on what went wrong with a client, instead of focusing on what’s next.
“You have more time and [some] people’s inclination is to lean toward the negative. They think about the negative with how they lost it – not what they could have done better, even if it was a transaction that they feel like they shouldn’t have lost from a pragmatic perspective and that the borrower made an incorrect decision,” McKay said.
“I’m like anyone else: I have those feelings initially too, but I have a process of getting past them and then thinking about it and saying, ‘What could I have done differently that would have led to the borrower making the correct decision, and how could I have framed the information differently, explained things differently, and made what I was offering more tangible?’”
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Some misconceptions still abound about brokers
McKay said the industry has made big strides in moving on from retail/broker squabbles seen in the past, and believes the relationship between the two spaces is continuing to improve.
But he also highlighted long-held myths prominent within realtor circles in certain markets that can sometimes be propagated by the competition: one, namely, being that independent brokers have less control over the transaction than retail LOs. That, he said, is an “incredibly unfair characterization” of the broker channel.
That basic argument is that brokers aren’t in command of the transaction because the underwriter they’re dealing with works for a different company – whereas in retail, they’re under the same roof.
But McKay described that as a “surface-level” claim: a good broker, he said, has a level of professionalism and strong relationships with other parties in the mortgage transaction that gives them just as much influence as retail officers – if not more – throughout the process.
He used his own brokerage as an example. “We put together extremely clean underwriting packages and I think in general, lenders very much like working with us,” he said.
“As a result, I have the ability to reach out directly to any underwriter or any underwriting manager, and in many of the lenders we work with, to the people that run wholesale operations, if I have a problem – just the same that any retail loan officer would.”
Element of choice gives brokers the edge
What’s more, loan officers in the retail space are tied to the decision of their underwriting team, while an independent broker has the option to stop sending business to a lender if they disagree with the way they’re underwriting a file or interacting with the broker or borrower.
“I have the ability to send business to however many lenders are in the channel,” McKay said, “whereas if a retail loan officer is unhappy with operations at their employer, their option is to go work somewhere else, which is a far more drastic choice.
“I can even make that decision in the middle of a transaction. I can move it to another lender. That is not something that’s available in retail. If a broker has their act together and knows how to run a business and how to originate good files, they have just as much if not more control than any other channel would over the transaction.”
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