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Told you they were serious about it. Central to the discussion was Home Mortgage Disclosure Act data from the Modified Loan Application Register covering some 4,316 filers. The published data contain loan level information filed by financial institutions, modified to protect consumer privacy – the latest iteration of which was released in March. The upshot: Figures show the average consumer saves an average of $9,400 going through a broker in wholesale verses retail – up to $10,400 for minorities. The findings have become something of a vindication for the broker channel ever since AIME crunched the numbers to show consumer gains.
Read more: Texas firm calls itself a ‘different breed’ of mortgage company
Noting his firm went all wholesale in 2018, Newman said the findings also served as validation. “It was the right decision to focus wholly on wholesale,” he said. “We were looking for information that would validate, and it was the best decision. What we discovered is that HMDA data is apples to apples in comparing wholesale to retail. We proved empirically that every year into 2021 that brokers were better for consumers to the tune of $9,400 per loan. It was validating. Brokers are the obvious choice.”
Newman recreated the consumer’s trek toward buying a home in arguing for the broker channel. “A lot of times, this is like consumers having two different providers for these services. The first one says ‘great, I can help you with that service and find you the best possible deal among five suppliers.’ You go to the second provider and that person says: ‘I only have one that I provide, and here’s the cost associated with it.’ As a consumer, what do you think? Ultimately, it’s about choice.”
Hodgson extended the metaphor. “We go above and beyond to educate our clients,” he said. “We’re not just order takers. I spend a lot of time looking at options for borrowers, helping them analyze numbers.” He also takes time to break down the level of down payment required as it relates to the interest rate du jour these days given the frequency of fluctuation as the Fed seeks to tame inflation. “Brokers are better, and we have the proof to back it up.”
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