Most Innovative Company in Mortgage
One of the most innovative companies in the mortgage space is also the largest wholesale lender.
As a reminder, there are Three Primary Channels For Mortgages: (1) Banks & Credit Unions; (2) Mortgage Banks; and (3) Brokers.
Banks perform many other functions (checking, savings, commercial lending) besides offering mortgages; mortgage banks only underwrite and fund mortgage loans and offer no traditional bank services; and brokers submit loans to third party (unaffiliated) mortgage bankers known as “wholesale lenders.”
JVM is ensconced in the mortgage banking channel – where we intend to remain, for reasons explained below.
In any case, the “innovative company” I mention above is United Wholesale Mortgage or UWM.
They are so innovative and dominant in the wholesale/broker space – with their amazing tech stack, low rates, great service, and excellent appraiser pool – that I often have both agents and loan officers ask me why we don’t jump back into the broker arena and/or align with UWM.
Here’s Why:
1. Can’t Touch This (Jumbo)
Every time we lock a jumbo loan, I put on my parachute pants and dance around the office screaming U Can’t Touch This!
I do that because I know that no broker in the land can come within 1/2% of our jumbo rates.
And, given how prevalent jumbo is right now in the mortgage world, we could never give up that pricing advantage.
2. Tech Stack
UWM truly does offer an amazing tech stack that brokers, who can’t afford to build out their tech stack, can tap into.
But – it does not hold a candle to JVM’s tech stack that is entirely integrated with our extraordinarily elaborate Salesforce buildout.
Our tech includes Blend, Front, Outlook, Encompass, Outreach, Sales Boomerang, Asana, BankingBridge, Bonusly, Candor, Greenhouse, Lattice, and a Banana Holder (among many other things).
Anyway – aligning with UWM for their tech stack would do us no good because ours is so much more powerful in the aggregate.
3. Appraisals
UWM has its own internal pool of appraisers and they are great!
But, their appraisal system is not as good as ours, as we can customize our appraiser pool for our various markets and our appraisal department can communicate directly with those appraisers in ways they never could if we worked with UWM or any wholesale lender. Many wholesale lenders in fact require the use of large Appraisal Management Companies that offer very poor service and quality – and that was a major reason why we left the broker channel in 2015.
4. Capital Markets Pickups
When mortgage bankers sell conforming and FHA loans, they get additional funds for servicing rights and other things. These are known as “capital markets pickups,” and they can be significant in some cases.
Wholesale lenders get those pickups too when they sell loans but do not share them with the brokers who send them loans. Because JVM does get capital markets pickups, we are able to offer lower rates than what we could offer if we were solely in the broker channel.
5. We Can Still Broker if Necessary
Sometimes, on rare occasions, the broker channel does offer loan products or rates that are better than what we can get in the banking channel – and when that is the case, we can still submit loans to the broker channel ourselves.
Finance of America, Quicken and Angel Oak are three examples of the many wholesale lenders we occasionally tap into.
6. Speed & Service
UWM’s service is renowned and amazing… but it can’t touch the service we can offer via our mortgage bank.
Whenever we lock loans in the broker channel, we push for a minimum of a 21-day close but more often we insist on 30 days (in contrast, we can close loans in 14 days with our own mortgage bank).
This is because no matter how good a wholesale lender’s service may be on any given day, we can simply never guarantee speed because we have no control over the wholesale lender’s operations.
I remember all too well the horror stories from our broker days – when wholesale lenders got more loan submissions than they could handle and it would take us 60 days to close a loan (even though we were promised 25 days when we submitted).
In summary – we will remain in the mortgage banking channel because we can offer better client experiences, better service and much lower rates.
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