Why more loan officers are choosing independence over retail

Independent brokerages have gained ground in recent years, as loan officers seek more control over their work, compensation, and client experience. Melissa Rifai, founder of Hyve Home Loans, is among those who’ve made the move, transitioning from a depository retail model to an independent brokerage earlier this year.  

Reflecting on her early years in banking, Rifai said she didn’t approach clients with a traditional sales mindset. "I've always been a person of a service heart,” she said. “And wouldn't you know it, in the bank, that actually was helpful. Because then people kept coming to me for things and advice because I would tell them the truth."  

After more than a decade in retail banking and mortgage lending - including roles at a credit union and a national bank - Rifai opened her own brokerage in January. Since launching, she’s engaged with a wide network of other brokers who share resources, advice, and tools.. "The amount of love and support and collaboration and community that came from other people who are my competitors led me to believe I could do this," she said.  

Autonomy and optionality attract top producers  

Rifai believes the appeal of independent brokerages comes down to flexibility. "A lot of retail institutions are very large, and they have a lot of control over every piece of the process," she said. That includes everything from advertising approvals to underwriting outcomes. "I know a bank here locally that tells their loan officers, you're not allowed to post on social media anything about your job or about mortgages. That's bananas."  

At an independent brokerage, that dynamic shifts. Brokers still need to remain compliant, but they can market more freely and pivot quickly. "If you're at a retail bank and your underwriter doesn't like something, that's the end of your loan," Rifai said. "Whereas on an independent mortgage broker side... I have 40 other lenders that I could send that loan to."  

She doesn’t believe in demonizing retail across the board. "Brokers don't belong in one big box, and retail doesn't either," she said. "But generally, it comes down to more autonomy, more control, and more options for your clients."  

Cost, competition, and the nuance of pricing  

While many brokers tout consumer savings as a key advantage, Rifai is cautious about blanket claims. "Coming from a retail depository bank where we had some really great rate options... it's difficult for me to say, in truth and honesty, now that I'm a broker, I will blanketly save you thousands," she said.  

Still, the ability to shop across multiple lenders creates real pricing flexibility. "Whatever rate the bank decided was the rate that day is the rate we had to offer," she explained. "Now I work with multiple lenders. On any given day, one might have better pricing than another."  

Add to that lower overhead - "there is a salary of a multitude of layers of managers" she no longer has to factor in, and Rifai says brokers can often be more competitive. But again, she cautions against oversimplifying. "Is it a small broker? A big broker? Who are they partnered with? Who are their lenders? There's so many factors that could go into that."  

Tech agility fuels the next chapter for brokers  

As AI and automation reshape the mortgage landscape, Rifai sees independent brokerages at the forefront of adaptation. "It's really hard to turn the Titanic," she said, referring to large retail institutions. "With independent mortgage brokerages, we are adopting more AI faster... which gives more time for us to build relationships, to be advisors."  

She sees that combination of tech and human touch as a key advantage for brokers moving forward. "At the end of the day, the clients want to work with [people]. They don't really care anymore about going to big box bank."  

While she emphasizes the benefits of brokerage, Rifai also acknowledges that different models work for different professionals. "That's not to say that I don't want to ever bad mouth any of the places that I've come from," she said. "There's the right place for everybody."