This might be a bit long, but I’d appreciate any feedback…
BACKGROUND:
I’ve been with my current brokerage for 5 years and I feel like it’s time to make a change. I’ve just hit $100K YTD for the first time in my 4 years as a full-time, commission-only LO here. However, I’m no longer motivated to grow my business at this brokerage. We’re a relatively small firm, focusing heavily on correspondent loans with UWM only. Besides my personal sphere and prospecting, I used to get a good amount of business from company-generated leads and realtor relationships, but that’s slowed down a lot. Regardless of lead flow, I only receive about 30% of the revenue I generate on each loan (roughly 100 bps on purchases and 50-65 bps on refis/HELOCs). I enjoy working with our in-house processing team, but it’s the management that’s pushing me away.
On several occasions, loans that would typically be allocated to loan officers have gone straight to the broker owner. After that, there’s always a rant at meetings about how all LOs need to find their own loans. It’s pretty clear that the most “motivated and ready to go” clients are being sent directly to the broker owners.
I understand it’s their business, and they can make whatever decisions they want, but I feel like the environment here is so “cooked” that they can’t even afford to pay their LOs unless we bring in our own business. On top of that, I’m really tired of being constantly nagged by management to produce “more, more, more.” I’m happy making $100K+ a year and would like to maintain that income.
So, after 5 years, I’m wondering:
Do I want to keep grinding to build my own book of business just to keep 30% of my revenue?
Is it common for the broker owner to take the majority of inbound company-generated leads?
True brokerage is definitely the way to go. UWM is awful; they call me constantly, and their rates are higher than others. I’ve been in the business for 22.5 years. Don’t use anyone who funds their own loans.
@Carter
So, in your view, even if I don’t go to a non-delegate lender, would I still stay competitive on pricing? I’ve found it particularly helpful when competing on VA loans.
Chen said: @Carter
So, in your view, even if I don’t go to a non-delegate lender, would I still stay competitive on pricing? I’ve found it particularly helpful when competing on VA loans.
If you’re doing correspondent loans, you have more overhead. The upside is that some lenders can offer 50 states coverage, which I can’t. But if you’re good at what you do and have increased your business, you’ll do well even without leads coming in from others.
Welcome to the biggest downturn in mortgage originations in the past 25 years.
Unless you have your own leads, business will continue to slow down, and mortgage bankers/brokers will keep consolidating and closing. Stick it out where you are and let the market recover. Once rates find some equilibrium, reassess the industry and make a move that will help you build a solid referral business with realtors to weather any market changes.
That’s my take after 25 years in mortgage banking. There’s no refi boom with rate cuts in sight.
@Joss
Thanks for the insight. I agree, the market timing might not be ideal, but I’m also planning a trip in December, which seems like a good time to clear my pipeline and start fresh. I’ve been really loyal to my broker and our team, but now I wonder if I’ve been taken advantage of. Out of all the LOs in the past 5 years, I’m the only one still here, while all the new LOs are coming in. I feel like I’ve been stuck in a position where I’m doing too much for too little compensation, especially given the lack of support from company-generated loans.
If you generate your own leads, you should be getting more. I’m with NEXA Mortgage, where I keep 80-100% of the comp. I also run my own branch and have a DBA. Even though we’re UWM’s largest partner, I still get to choose where to send my files, among over 200 partners. Let me know if you want to talk.
If you’re only getting 30% of the revenue per loan, they might be violating TILA. They are supposed to pay a flat fee per loan, a percentage of the loan amount, or bonuses for performance. Pay shouldn’t fluctuate based on loan revenue.
Gotcha, I worked in WA. Fairway might be worth checking out. They offer good comp plans and competitive rates, plus you can adjust pricing variances without sacrificing comp. Great underwriting and back-office support too. Also, they don’t take a cut beyond your comp for self-generated deals.
I love my flat-fee brokerage with 100+ lenders and a few mini-corr options. It’s definitely greener than my first small brokerage, where I loved the relationships but didn’t have all the resources I needed.
@Chen
Yeah, LPC or BPC is $995. If you use the company’s processors, there’s an additional $750-950, depending on lender/state. My previous brokerage had a generous breakdown, but this current structure works better for me.