Retail lenders and brokers are pushing harder than ever to secure and retain business
Fierce competition between mortgage brokers and retail lenders for business is nothing new, but that battle has been especially intense this year with purchase and refinance activity thin on the ground across many major markets.
On the retail side, a common strategy for securing new business is dangling low interest rates in front of borrowers – even if those offerings come with steep discount points, or fees paid upfront to lenders to reduce the interest rate on a mortgage loan.
That approach can sometimes rankle with brokers outside the retail space, especially if communication with the borrower isn’t clear enough about why such a low rate is available.
“They’ll hide the fact that the discount point is tied to the rates, but they do this because their customer knows to look at the rate less and to look at the [overall] cost,” Amir Nurani (pictured top), broker-owner at Left Coast Leaders in California, told Mortgage Professional America.
“For example, if a rate with no points was 7% but a rate with points was 6.3%, they’ll advertise 6.3% and be very evasive in terms of being transparent about the cost. This works: the customer sees the rate, they get very excited about it, and they don’t really think to question the cost.”
While that’s been a common strategy across the retail space for years, Nurani – who spent a decade in the retail sector before moving to wholesale – said it’s especially important for brokers to clearly spell out what a borrower’s arrangement will actually be if they take up the lender on their offer.
“As the mortgage broker, you come in and say, ‘Look, if we did that same thing, this is what your costs would be,’” he said. “‘Alright, let’s look at what this is actually costing you.’ When you start pointing out to people that they’re paying $7,000, $8,000, $12,000, $15,000 to obtain that rate and the fact that they could get that same rate with you without that cost, it becomes very attractive. It almost sells itself.”
Mortgage broker David Kakish emphasizes transparency as essential, not optional, in the financial services industry. He notes that rising rates exposed how lenders sometimes obscure or manipulate pricing and fees.https://t.co/pfh6ikZAyG
— Mortgage Professional America Magazine (@MPAMagazineUS) June 17, 2025
How brokers are winning the social media battle
Brokers and retail lenders are also locked in a battle to capture the eyes and ears of borrowers, a tussle that’s increasingly taking place over social media.
Visibility, Nurani said, is enormously important – and running ads on Facebook and other social media platforms to generate leads has been a huge focus for his operation this year, not least because that means taking on retail where it also advertises.
Upscaling the technology stack is another key step for brokers, he said. “We spend quite a bit of money on social media in the ad space to generate lead traffic and when we get that lead traffic, we nurture it,” he said.
“We have a lot of technology investments that help us search for that, when it comes to CRM and automation and AI. We lever all this stuff up to try and [attract] customers from all angles.”
Retailers up their game as refinancing surge looms
High-profile acquisitions including Rocket’s purchase of servicing giant Mr. Cooper suggest that retailers are gearing up for a refinance boom in the expectation of a dip in interest rates in the months ahead.
That means brokers are having to fight even harder to secure business – but Nurani spelled out another advantage he sees brokers having over retail LOs: namely, their ability to market with more freedom and less oversight than those in the retail space.
“One of the things I think mortgage brokers have a huge edge on, because we’re independent, is the ability to market via video, over social media,” he said. “Can retail do that? Sure. But retail has a bottle. A lot of these big companies have giant legal departments where their LOs… have to get approval to be able to put that content out.
“The problem with that is the consumer knows it’s not authentic. Another problem with that is if you have to go through a process to wait before you can actually get the video content out, sometimes speed of delivery and deployment is what gives you the edge.”
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