How the largest wholesale lender builds strong broker bonds
When it comes to the wholesale channel of the mortgage industry, a company in the suburbs of Detroit, Michigan, has emerged as one of the giants of the industry over the last four decades.
Starting as Shore Mortgage in 1986, United Wholesale Mortgage (UWM) occupies a more than 600,000-square-foot campus in Pontiac, Michigan. And if you ask the company, the reason they were able to grow to such a size is because of independent mortgage brokers.
Because brokers drive the business for UWM, building strong relationships with those brokers is mission-critical for the company. One company executive said that the broker relationship drives everything UWM does.
Desmond P. Smith (pictured top), EVP and chief growth officer of UWM, said ensuring the success of the brokers they work with is the number one priority of the company.
“We have no other way to support the nearly 9,000 people who work at UWM if brokers aren't successful,” Smith told Mortgage Professional America. “I like to say we are 100% aligned with the success of brokers. We need them to be successful so that we can be successful at UWM.”
Retail to wholesale transition
Wholesale brokers are closing in on 30% of the market share in the mortgage industry. Smith said one of the reasons the wholesale channel continues to grow is that the loan process is faster and less expensive in wholesale than what is experienced in the typical retail transaction.
“Brokers deliver a cheaper, faster, and better experience for the end consumer than what retail has traditionally done,” Smith said. “If you look at the average cost in terms of what a broker or consumer gets going through a broker, it's typically significantly cheaper. That's why, from a broker standpoint, you've seen it continue to grow, and hopefully, we get to that 50% area sometime in the foreseeable future.”
For brokers who come over from retail to wholesale, the whole environment is typically eye-opening. This is true for Smith as well, who previously worked for several of the nation’s largest retail banking lenders.
“I spent the first 25 years of my career in retail,” he said. “I thought retail was everything and that no one should ever be in wholesale. And then you get the opportunity to see the other side. Obviously, for me, I get the opportunity to work for the other side. Because when you're in retail, you have only one option, and you only have one way to do things. You don’t get to see that you don't need to take two weeks in underwriting. It doesn’t take 10 days to get an appraisal back.
“No one ever shared with them, because they were always retail, and they never knew that they had multiple options in terms of products and pricing and all those things. As a broker, you're the deciding factor on what's best for your consumer, not the company you work for.”
When brokers make that transition and work with UWM, Smith said they stress to brokers that the company is there to support them, but it's up to the individual broker as to how they will do business.
“That's why we always ask people to come out here and see us,” he said. “I like to think of UWM as your back office, your back room. A mortgage broker does whatever they choose to do in their community, or how they go about acquiring clients. We will give suggestions. We will help them if they like. But our superpower is the back office.”
Figure out your goals
Smith said even though he and the company won’t dictate to brokers what to do, they’re always happy to offer business advice for brokers to help grow their business. The first step for brokers is to figure out what they want from their business.
“The number one thing I suggest again, I try never to tell a broker what to do,” he said. “I don't have the right. They're an independent mortgage broker. I always tell them the first thing I would do is really figure out what they want out of their brokerage. If you want something more, typically it takes us to look in the mirror and go, ‘What's going to give me joy, what's going to give me happiness?’ Figure that out first, and then UWM will do everything we can to support them.”
The other thing he encourages brokers to do is that once they figure out what they want out of their business, they should take advantage of all the tools and resources the company gives brokers.
“What they should do once they figure out the first part is to use everything we have to offer,” Smith said. “We will help you with your marketing. We will help you get more licenses. Obviously, we will help you get your loans processed. There’s pretty much nothing we won't do to help support a broker. I think the biggest challenge a lot of people have is just getting very clear about what they want to achieve and then leveraging us to help them achieve their goals.”
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This article is part of our Monthly Spotlight series, which in March focuses on broker/lender relationships. Full coverage can be found here.
