The nation’s largest mortgage broker has joined the initiative to fight unethical wholesale lending practices.
BRAWL gaining ground in fight against ‘whole-tail’ lending
Mortgage brokers call for truth on whole-tail lending
C2 Financial Corporate spokesman Ron Temko said the company supports Brokers Rallying Against Whole-Tail Lending (BRAWL) and will work to stop “whole-tail” lenders – primarily retail-focused companies operating in wholesale.
“The consistent message of BRAWL is our customers are our customers, and we are no longer going to allow lenders to steal our customers and us continue to send them new business,” Temko said Wednesday during C2 Financial Corp’s annual conference. “Mortgage brokers should be offered the same protections that financial advisors have when they place their clients with various financial institutions.”
BRAWL has publicly identified lenders that solicit and repurpose past customers from mortgage brokers for their own benefit, circumventing the brokers and costing them millions. Quicken Loans, loanDepot, and Freedom Mortgage are the largest offenders, according to the group.
Between 2011 and 2015, 40% of all wholesale loans were refinanced by the lenders those loans were brokered to, and 18% of all wholesale loans were refinanced twice, according to BRAWL. For every thousand loans mortgage brokers closed, 580 new transactions were closed for those same customers.
BRAWL is pushing for wholesale lender policies that would require all past wholesale customers to be rerouted to their original mortgage brokers, guaranteeing that the broker is not cut out of any refinancing deals.
Many wholesale lenders have agreed, and BRAWL continues to reach out to more.
“Still, there is group of lenders stonewalling their efforts, hoping this will go away as time goes by,” Temko said.
Anthony Casa, president of Garden State Home Loans and a founding member of BRAWL, said C2 Financial’s backing sends a strong message that the mortgage broker community is united against whole-tail lending.
Established in October, BRAWL has steadily gained traction – over 9,000 independent mortgage professionals and big-name lenders like Parkside Lending, Plaza Home Mortgage and United Wholesale Mortgage have all expressed their support.
“The BRAWL movement has been powerful influencing changes that will allow mortgage brokers to grow their businesses and maintain their relationships with their customers,” Casa said.