It wasn't too long ago that the experts in the mortgage industry were speculating that the wholesale lender would be going the way of the dinosaur. For years, as the market has changed and the way people buy homes has evolved, the mortgage broker didn't really seem to have a place to many of us.
But speculation has been trumped by reality. In the past few years, the success of the mortgage broker has experienced a dramatic resurgence. How can this be? What do mortgage brokers bring to the table that has helped them survive the changes in the market?
On the June 1 episode of my Lykken on Lending radio show, I had the opportunity to discuss this very topic with Greg Murray, CEO of Wholesale One. As the market has changed, mortgage brokers have proved to possess a tremendous amount of adaptability and flexibility. They've met change with change and have done what they need to do to fill the niches that keep them competitive. How do they do this? According to Greg, much of it has to do with the way they're structured. They're independent business operators who are assuming the risk themselves. Consequently, they are entrepreneurial. They are natural underdogs that work hard to achieve success.
As we continue on through 2015, it is likely that we will see mortgage brokers play a more critical role in the industry's value chain. Wholesale lenders have proven to be nimble no matter what the market throws at them. Contrary to what we once believed, they aren't likely to go extinct; on the contrary, they will most likely become even more vital to the industry as time goes by.