Wholesale lenders on the rise

October 07, 2020

In this edition, we want to focus on Wholesale Lenders. The last one and a half year has been a dream run for mortgage lenders. Loan volume increased from 1.15 Mn in Q1 2019 to 3 Mn in Q2 2020. Lenders of all stripes benefited from this growth. However, Wholesale Lenders are the biggest beneficiaries of this growth. Today, Wholesale Lenders account for 20% of the overall mortgage volume in the country. So this week, we decided to share some news and views on wholesale lenders and wholesale lending.

Last week, we wrote about 'mortgage metrics'. If you are a wholesale lender and there is just one metric that you can focus on, what would that be? I would say it would undoubtedly be the Average Time to Close, alternately called Turn Time by wholesale lenders.

Wholesale lenders sell primarily through brokers. Brokers provide choice to borrowers. A broker send the borrowers loan file to multiple wholesale lenders to get the best outcome for the borrower. The speed at which the lender responds often becomes the biggest driver choosing the lender. The faster the lender closes the loan, the more loans the broker can do in a month. If you are a wholesale lender, go back and check your time to close and check it every day, because that is what is going to make or break your business.

Apart from closing loans faster, as a wholesale lender you want to make your broker's job easy with all the documentation. The fewer submissions needed by the broker to get a loan closed, the better it is for the broker and the borrower. The best performing wholesale lenders all have a portal and/or an app for brokers to log in loans and submit documents and information in an easy manner. Apart from providing a simple workflow, some wholesale lenders actually incentivise brokers to get the loan file correct the first time itself, by giving such brokers higher priority in their response times.

The third most important factor for a wholesale lender is efficiency. While brokers (and to some extent borrowers) want fast response, borrowers are looking for the lowest interest rates. A highly efficient loan production process helps wholesale lenders price their loans lesser than the competition. You will see the top wholesale lenders all having a high level (well, relatively high) of automation in the form of - Automated Document Recognition (ADR), Automation Data Extraction (ADE), Integrations to multiple vendors etc.

So close fast, equip brokers with tools and be highly efficient. Those are the critical success factors for wholesale lending.

Here you can read what is happening in the market and how some wholesale lenders are setting the benchmarks for others.

Have a blast!

Check out how United Wholesale Mortgage incentivises brokers to get their loan packages right the first time itself.

Three independent wholesale brokers discussed how they found success navigating the wholesale lending channel in HousingWire's latest webinar.

This wholesale lender beat out lending giant Wells Fargo in total volume – and plans to keep growing

United Wholesale Mortgage announced the arrival of Blink+ which now offers loan officers a point of sale, loan origination system and customer relationship manager all-in-one package.

loanDepot’s mello platform enables brokers to generate and email full initial disclosures packages to their borrowers for eSignature.