Expert analyses: Opportunities and challenges ahead for loan originators and brokers

[00:00:07] Fergal McAlinden: 
Hello again, and thanks for joining us on another edition of MPA TV. I'm Fergal McAlinden, I'm the Managing Editor here at Mortgage Professional America. Today, we're kicking off our new Broker Intel series, featuring discussions with leading mortgage pros from across the US on all the most important mortgage topics of the day. We'll be hearing expert insights and analysis from the brokering industry on a range of different topics, from regulatory trends to market strategy and everything in between. Joining us today for our inaugural episode, I'm very pleased to welcome Brian Cooke, President and CEO at World Home Loans Incorporated, Kevin Oto, Broker Owner at Greenhaven Capital Incorporated, and Kurt Strandson, President and CEO at Pinnacle Mortgage Corporation. Brian, I'm going to get things started with you. Just when we talk about kind of trends for loan originators, both now and looking ahead. What's your thoughts on how things are looking and what do you see as the main opportunities for LOs and for brokers to grow their market share? 

[00:01:07] Brian Cooke: 
I think the next few years will reward efficiency and specialization. The market's been tough, but it's also cleared out a lot of the noise last couple of years. So for originators who run tight systems and know their lane, there's huge upside at World Home Loans. Our niche is on VA lending. A lot of eligible veterans still don't use their benefit, and that's a massive opportunity. So I think brokers who educate, communicate, and move fast are the ones who will capture the next wave of growth. 

[00:01:36] Fergal McAlinden: 
Yeah, interesting that you mentioned that kind of, well, not an exodus from the space, but you know, a lot of fellows and brokers who left over the past few years. And I know that a lot of those who stay kind of view the people who are left in the industry as, you know, kind of professionals serving in front of the long also. You know, that's a really positive trend. Kevin, how about for you? What are the main types of opportunities you're looking at over the next few years for LOs? 

[00:02:01] Kevin Oto: 
Yeah, I kind of agree with Brian. I think, like you said, there was a mass exodus of a lot of LOs when rates started to creep up. I think those that stuck around are definitely going to benefit. I think we're starting to see more stability in the market right now as far as rates go. And I think if you look at the future, there is a lot of opportunities for potentially lower rates or more opportunities for those that stuck in the business. And obviously with the changes with technology and AI, I think the people that are actually embracing change and embracing all the new technologies and making processes more efficient while still maintaining that personal touch are the ones who are really going to succeed going forward. 

[00:02:35] Fergal McAlinden: 
Kurt, how about for you? 

[00:02:37] Kurt Strandson: 
Yeah. So basically what we're trying to advocating for at our office here is focusing on building relationships. And if you had a transaction in the past with someone, might've had their go-to loan officer, go-to lender, they might be gone. There's been a massive amount of attrition in the last three years post-COVID. So if you can work on building relationships, providing service, and making sure you're available to them 24-7, whether it be you or a teammate, you're going to win a lot of business in this market with a higher volume in the last couple of years this year, but also less loan officers to service that volume. 

[00:03:11] Fergal McAlinden: 
For sure. So big opportunities ahead there. But I know that we also kind of ignore some of the challenges that we've been seeing. You know it's been, I think, a market in transition is kind of the way that it's been described over the past couple of years. But Kevin, what are your thoughts on kind of the biggest challenges that LOs and brokers are facing in the current market and also looking ahead? 

[00:03:33] Kevin Oto: 
I think one of the biggest challenges I've seen really is just margins being compressed and costs going up on certain things. You have credit costs going up and you have, you know, a more competitive market. LOs cannot make as much as they once did. So I was trying to find that balance of still being profitable, still managing your expenses, and still providing that great customer service. So I think that is probably one of the biggest challenges I've seen. 

[00:03:58] Fergal McAlinden: 
Absolutely. And we all know about the credit costs that you mentioned. I mean, the rise over the past couple of years has been pretty startling for sure. Kurt, how about for you? Big challenges ahead? 

[00:04:09] Kurt Strandson: 
Yeah, I agree with a lot what Kevin said. But in addition, what we chose to do is get licensed in more states, get into some different population centers that have more transactions, higher loan volume. With the costs increasing on a per loan basis, the answer to that is just write more loans, that there's not really another alternative there. And that will change as the market starts to creep back the other direction. I think, you know, Barry Habib reported at the convention the other day, they're expecting an October, November rate cut. And I think the marker's always been if something gets into the high fives again, you're going to see an influx of more business. I think the other piece to that is knowing your partners, knowing where you're placing your loans, and knowing what their capacity is. I know with the increase in refinances the last 30, 45 days, some partners turn times have slowed down so you got to know where to place your loans, who's at what capacity. So when you write a flurry of refinances as rates drop a little bit, you're not then getting stuck in the mud because the places you're putting them can't actually get them through fast enough. So it's a mixture of things, but I think the answer when there's margin compression is write more loans. 

[00:05:20] Fergal McAlinden: 
Absolutely. And those Barry Habib comments that you mentioned, I think were kind of the big headline, the big takeaway from the weekend. I think as low as five and a half next year. So really interesting and we'll see how that goes. Brian, what about for you? Some of the big challenges that you're identifying looking ahead? 

[00:05:37] Brian Cooke: 
As they just mentioned, margin compression is real. And so it's all about finding how to originate more loans in the same amount of time that we have. So I say the biggest challenge right now is time and originators need to really focus on their processes and systems to enable them to write more loans, to hire the staff, to handle the back end of the loans so you can close more loans because you're going to need to close more loans now than ever before to make the same amount of income you did several years ago. 

[00:06:11] Fergal McAlinden: 
Well, you've just led perfectly into my next question. So I'm going to stay with you for this one, Brian. I mean, you talked about some of the changes that have been in place. And we all know that, you know, people talked about the pandemic supercharging the use of technology in the industry. We've had obviously the AI boom over the past couple of years. And I'm just wondering for each of you and starting with Brian, what's been the biggest change in the way that you've run your own business over the past few years? 

[00:06:38] Brian Cooke: 
Well, I just launched my own brokerage. So it's my challenge right now is going from like top producer. I did $325 million last year just by myself. So it's just really breaking down my process now that I have the opportunity from the ground up to build the perfect loan process for spending hours, breaking everything down and building systems, utilizing AI so that we can hit the market and scale rapidly and attract top producers to double, two times, three times their production. So that's what I'm focused on is really the process. 

[00:07:17] Fergal McAlinden: 
That's great. Okay. And Kevin, how about for you? Any big changes that you made over the past few years? 

[00:07:23] Kevin Oto: 
Yeah, I agree. Like what everyone's been saying. So with the margin compressions, you got to write more loans. In order to write more loans, you got to be able to have a more efficient and streamlined process. So it's really just implementing as many automations as we can to kind of limit the repetitive work, trying to figure out how to get from A to B a little bit quicker. And at the same time, things have changed my business is the way we market too. You know, a couple of years ago, we started doing a lot of social media, video content, podcast content, and, you know, working with our partners to get them on video. That was something that we really didn't embrace. But in this day and age, I feel like, you know, you have to have some sort of presence online. So shifting towards marketing more on social media and online, and, you know, all these other online platforms was, you know, a change to get everyone that may be a little bit uncomfortable, get them comfortable to be in front of the camera and, you know, put out some content. 

[00:08:18] Fergal McAlinden: 
And Kevin, what's been the main way that you've been doing that? What platform are you using specifically? 

[00:08:24] Kevin Oto: 
I have a social media company that helps me, but we use basically all platforms. They post on my, you know, Instagram, Facebook, TikTok, YouTube, LinkedIn, basically all platforms. They respond to all my reviews on Google. It's just making sure that presence is there and something is consistently popping up from us. 

[00:08:47] Fergal McAlinden: 
Interesting. Okay. So covering all the bases. Nice. Kurt, how about you? 

[00:08:44] Kurt Strandson: 
Yeah, we're leaning into using some of the new technology, specifically the MMIs of the world, the RETRs, the redders, and really digging a little more deeper into strategically who we want to be working with. You know, a lot of times loan officers will just do the activities. They'll go have coffee meetings. They'll go network. They'll go do things. But you see some statistics that in the last 12 months, 70 something percent of realtors never even sold a house. So you want to make sure you're doing the activities with actually places that have opportunities to refer you and build relationships, but build the right ones. And the tools are now out there to find that information. You know, if you've been in the industry for a while, like some of us, you know, they didn't have those tools 10, 15, 20 years ago. So you're kind of just shooting in a barrel where now you can say, Hey, I can look up in this market who does what in volume, who they're working with now, what my competition looks like, and then strategically pursue their business. I think that's a huge, huge benefit to use. 

[00:09:50] Fergal McAlinden: 
You know, you mentioned earlier on getting licensed in multiple states, which I think probably makes you a good person to answer the question that I have about regulation and the regulatory side. I want to ask each of you about whether there's anything on that side that you want to see reformed, any rules in place that you think should be introduced, or even any kind of challenges that you're facing with regulation at the minute? Kurt, any thoughts? 

[00:10:14] Kurt Strandson: 
Yeah, absolutely. Actually, we've been working on that with, I'm in New Hampshire. That's our home state. And as you can imagine, that's why we sought to go into other states, that's a smaller population place. We work a lot with our bank and department, we have a great relationship with them. And one of the things we're looking at is, you know, as we added states, we had like 10 audits in 13 months. Right. That's a time, you call it time suck. Well, it's what you spend a lot of time preparing and answering and conversing with those regulators. And they had talked about a one audit, one company, one year system where they're going to be able to collaborate with other states. So if a state comes in, they can say, hey, I saw you were just audited by Vermont or New Jersey or New Hampshire. We can comb through that audit and then see if there's anything else we want to look at to simplify that process. I know that is being looked at. It was spoken about between regulators at a recent conference down south. In those audits, we've talked to those regulators about that. And it's also something I mentioned to our Brokers Action Coalition about looking into as well. Those things don't happen overnight. But I think that, you know, I remember being audited 20 years ago when I first opened my first brokerage. And, you know, you weren't allowed to share your audit results. It was proprietary. You couldn't share a New Hampshire audit with a Massachusetts. So I think improvements in that area will help new brokers and current brokers who, you know, when you have, you want to be able to compete with lower margins. You want to win those business. You don't want to be investing in, you know, 15 compliance officers to be doing all those audits. It's something that makes sense. And I know, you know, the state of New Hampshire, they just hired three additional IT-focused employees. So they're trying to help streamline that process so it's more efficient for everybody.  

[00:12:04] Fergal McAlinden:
I mean, 10 audits in 13 months while you're trying to spin a lot of other plates, that's got to be tough. 

[00:12:12] Kurt Strandson: 
It is. It forces you to be organized and it forces you to have the right systems and protocols in place. We have a gentleman on my staff who's been working with me for almost 23 years. He's our VP of compliance. We've never, I don't knock on wood, we've never had an infraction, a fine, a warning of any sort. But you have to be organized. You have to be in tune when people say, you know, why should I join one of our trade groups? Because they have the resources, they have the collaboration to help you when those things come up. And it doesn't, you know, stop the wheels in motion of actually production and production for your business. 

[00:12:46] Fergal McAlinden: 
For sure. Kevin, how about for you on the regulatory side, anything that you think is kind of impacting your business at the moment or anything you think could make things easier? 

[00:12:56] Kevin Oto: 
I agree with Kurt as well regarding the licensing, the auditing. I'm licensed in multiple states as well. I got audited, I think last year by Oregon and Maryland, two very different audits. Maryland was a little bit more detailed, a little tougher. So I agree with that. Other than that, I think there's some old rules that need to be updated. One being the LO comp when you look at LOs on the broker side versus the retail side, I think there's definitely some changes that need to be made to maybe level out the playing field for brokers. I think there needs to be some updates there. I would like to see more transparency or maybe changes around builder incentives when it comes to builder lenders being able to compete or being offered certain center incentives, you know, when just for their own lenders and instead of brokers. I think there's not necessarily an equal playing field there. I think some of the profits may be baked into maybe some builders' pricing or, you know, when it comes to using their preferred lender. So, yeah, those are the, I guess, three major things that I would like to see some changes with to kind of equal the playing field and make things a little bit easier for everyone. Yeah, hopefully these things would make it better for consumers to give them more options and, you know, better potential rates and service.  

[00:14:13] Fergal McAlinden: 
For sure. And as you mentioned on the auditing side, it's not just the, it's not just the act of getting audited. It's different audits, different intensity of audits and things like that. So that's going to be tough too. Brian, how about for you? Anything on the regulatory side you think needs to be changed or needs to be introduced? 

[00:14:30] Brian Cooke: 
Well, I'm going through the process of licensing nationwide and it's just, it's a pain. The fact that we have to do 50 different applications at each state, I think is ludicrous in this day and age. It's a more streamlined process, similar process to get licensed across the nation would be very helpful for brokers, which are making a big comeback in market share. And then also in the VA space, I haven't seen much improvement in the appraisal process, which is one of the biggest hurdles in getting a VA loan closed from just a time and also efficiency perspective. I think there could be a lot of improvements made. Veterans deserve speed and simplicity and not more red tape. 

[00:15:17] Fergal McAlinden: 
Absolutely. Okay. So one other question that I had for everybody was about lenders and the whole sales space. There's been a lot of talk in the industry, as we know, over the past few weeks about, you know, some lenders intensifying their presence there, some rumors about others getting involved. I'm wondering if everybody sees more lenders increasing their presence in the wholesale space rather in the near future. Maybe Kurt, we'll talk with you on that one. 

[00:15:43] Kurt Strandson: 
Yeah. I mean, we have, I think, 87 total lenders that we are partnered with currently and they all have slightly different business models. I think you have very pro-wholesale partners and then you have others that are originating the service. And I think you have to just be aware of where your partner stands in that. And you have to be, you know, you have to stay in touch with your clients. I think there's partners that are very outspoken about that, you know, once a loan's placed with them, they feel it's there right after a certain period of time to solicit them and solicit them very aggressively. You just have to be aware of that. You know, there's a lot of, you know, controversy among trade groups with the right or not the right to do that and who's pro broker and who's not pro broker. And I think the way we focus on it is we have to be pro relationship. If you have the relationships, if you have the service, if you have the follow-up with your clients, that's not going to really matter as much. And it takes a little more automation. Use the technology, use the AI tools, use the CRM systems to stay in front of your clients. And they might answer a servicing call. They might answer a servicing solicitation. They may answer a trigger lead for your last few months that they're going to be around. But if you have built the right systems, the right follow-up, the right relationships, they're going to check in with you as well. And you should be able to maintain a large portion of that business if you do it the right way. 

[00:17:09] Fergal McAlinden: 
OK, great stuff. So it's all about the relationships. Brian, how about for you? What are your thoughts on that topic? 

[00:17:15] Brian Cooke: 
I definitely think more lenders are going to double down on wholesale. I think it's where the most efficient production happens. I'm a broker myself, seven years on the side, so I've seen both sides of the industry. I just feel brokers are faster, more agile and closer to the consumer. We shop dozens of lenders to try to get our clients the best deal. And then I also believe brokers are going to need to build a brand. That's what I've invested, building a brand to compete with the big boys, the Rockets and the UWMs out there. So I think the broker channel is the model of the future for us. 

[00:17:58] Fergal McAlinden: 
Great stuff. The model of the future. Kevin, wholesale lenders, you think they're going to get more involved on the broker side? 

[00:18:05] Kevin Oto: 
I do. I think, as Brian mentioned earlier, the broker market share is growing. So as the broker market share grows, I think more lenders are going to jump into the market. And we're already seeing it. And we have a lot of niche lenders that do just certain type of products, whether it's a certain non-QM loan or something that maybe retail doesn't have right now. So I think as margins start to be compressed and things get tougher, lenders are going to come out with new products as well. And they're probably going to offer them to brokers first. So as our market share grows, the wholesale channel will grow and more lenders will jump in. 

[00:18:40] Fergal McAlinden: 
All right, brilliant. Well, such positive developments for sure. I'm going to let everyone go shortly, but before we wrap things up, I want to just ask any final thoughts about the lay of the land for the mortgage industry in general as we look ahead. And Kevin, maybe we'll start with you. Are you optimistic, positive about where things are headed? 

[00:19:00] Kevin Oto: 
Yeah, I am. I mean, at the end of the day, I don't think AI is going to take my job. I think AI is going to help improve the efficiency of the job. And like Kurt said, and I know Brian knows, this is a relationship-based business. We're here to create relationships with not only realtors, lenders, our clients, and educate these to help them make better financial decisions when it comes to their mortgage. We are their mortgage advisors, people that are going to help them build wealth through real estate. This can't be done just through AI. Some people have very complex financial situations and you need a human who actually has been doing it for years, who knows their products, knows what's out there to help people grow their wealth.  

[00:19:41] Fergal McAlinden: 
Hey, I know from the amount of times that I use AI and it gives me a wrong answer that I'm never using it for a mortgage, so you can kind of meet for that one. Kurt, how about for you? Any thoughts on the lay of the land as we look ahead? 

[00:19:54] Kurt Strandson: 
Yeah, I'm also very optimistic. I think, you know, we saw the worst of the backside of COVID. I think, you know, 2023, 2024 rates got really high, highest rates in 23 years. I think it crested in October over 8%. I think as rates creep back down, this is the new norm. I think we're going to be in this wheelhouse for a little bit. And I think, you know, we're looking at volume as similar as one of our best COVID years right now, because A, there's less people writing loans. There's a healthy amount of volume out there. And there's inventory available. You know, one of the things, to be healthy on as a smaller mid-sized shop is purchase business. And if you can focus on purchase business, that's great, but it's hard to do it when there isn't a lot of inventory. So as the market seems to swing back to a more normal inventory market and there's houses available, you're going to convert more of your prequels. You're going to convert more of those purchase leads. And I think it's going to be a great 2026. I think listening to Barry the other day was very, very exciting because everybody's always said, if you get into the high fives, people are going to start putting more houses on the market because they don't want to replace their current loan. That's a nice low rate with a higher rate. So I think we're looking at a very, very big opportunity in 2026. I think it's a great time for people to actually get back in the business. 

[00:21:10] Fergal McAlinden: 
Absolutely. And it seems to me even that people are more optimistic moving into 26 than they were moving into 25, which is great for brokers and for the industry. Brian, last word to you on this one. How are you feeling looking ahead? 

[00:21:24] Brian Cooke: 
Yeah, I think the next few years are going to separate the efficient from the average. You know, rates and market cycles always shift, but execution, trust, and speed always win. I believe we're in a renaissance, as I said earlier, for mortgage brokers who build around systems and service. And for us at World Home Loans, this means to deliver victory on the home front, helping families and veterans achieve homeownership faster and better than ever. 

[00:21:53] Fergal McAlinden: 
All right, well that is just about all we have time for on today's edition of MPA TV. My thanks once again to each of our panelists for joining us. Thanks to you for watching, and we will see you next time.