Niche product offerings, often working side-by-side with primary loans, can help small lenders thrive, says wholesale president
The current landscape of the mortgage lending world continues to see the large lending companies getting larger. Not only are they doing more loans, but they’re acquiring other companies to offer products at a scale that smaller lenders can’t compete with.
Dan Richards (pictured top), president of wholesale lender Flyhomes, said that for smaller lenders, competing with the megalenders can be a challenge.
“There has to be some kind of differentiated offering if you're going to win in the wholesale space with UWM and Rocket and a handful of others,” Richards told Mortgage Professional America. “They have legitimate scale and a kind of inertia. They have a lot of brokers who are used to using them, and a lot of their brokers don't really shop around.
“They don't really broker. They funnel loan apps into their preferred wholesale lender. To break the mold and get them out of that inertia, or that rut, you've got to offer something super unique. For us, it's bridge loans, and I think we refined that product to be a very inexpensive and simple way for both a broker and their borrower to transact for others.”
Using technology
One way Richards suggested companies can differentiate themselves from larger lenders is by adopting technologies that the larger lenders have not yet implemented.
“It may be something like AI,” he said. “Like we can fulfill and operate in half the time that other wholesale lenders can, or provide incredible service and upfront kind of loan structuring and deal desk that others might not have. With the onset of AI and in specialty financing or unique products, that's where I would focus. If you try to play the price game or do the same thing that everyone else is doing, it's just not going to work out long term.”
Part of doing something different is offering products that can work alongside offerings from larger lenders. That way, it becomes a complementary product instead of a competing one.
“The way that we structured our business and our products is that they're 100% complementary to what they're already doing and what they're already using,” Richards said. “They may have a preferred wholesale lender they're going to, they might be an IMB that we're already working with, and they have their in-house products. We're never going to displace those. We're always complementary.”
By creating a product that integrates with other products, a mortgage broker can process both loans simultaneously without needing a separate loan process.
“We’ve structured it like a traditional wholesale channel so that it's easy to understand, easy to get on board, and easy to pitch,” he said. “They're just brokering a bridge loan on top of what they're already doing, and there's no additional work to do other than sign a few extra disclosures. I think a key to the growth that we've seen over the last couple of years of launching this channel.”
The PUFF method
Richards said for brokers who might be struggling in the battle against larger competitors, he offers a simple solution: making some phone calls.
“I heard an acronym the other day called PUFF, and it stands for pick up the freaking phone,” he said. “Essentially, the idea of just picking up the phone and making a phone call, or picking up when someone calls, if you can do that consistently, time after time, day after day, week after week, that is by far the best way to build a business.
“Especially in the era of AI, when so much is automated and so many of those phone calls, even in the near future, are going to be with AI agents. The value of talking to a human and building relationships, but doing so with consistency and with tenacity, I think, is the secret to winning in this space.”
In a tough mortgage market, one Idaho broker sees her clients as "extended family," not transactions, and believes brokers' value is clearer than ever.https://t.co/FFdXmEi5u1
— Mortgage Professional America Magazine (@MPAMagazineUS) August 6, 2025
In addition to building those relationships, he urges brokers to keep the right mindset, even in challenging times.
“I heard a quote not too long ago from John D Rockefeller,” Richards said. “He said, ‘Victory is a habit. Get rid of the habit of being distracted. You cannot sharpen your razor on velvet. The war is inevitable. Let it come.’ I think that's the mentality that we have to have in this industry. It is not going to be smooth sailing. Those willing to dive in and get their hands dirty and really own it, there are some amazing opportunities ahead.”
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