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November 27, 2023

By Mortgage Professional America

This year has been a challenging one for brokers and their clients, but there is still room for optimism, as four industry veterans share how they are able to win in this difficult market

TIMES ARE TOUGH, but as the timid exit the mortgage market, that frees up room for those committed brokers who are in it for the long haul. And among the hard news, there is room for optimism. Those were some of the insights provided by four mortgage industry leaders during a recent roundtable hosted by MPA TV.

“We’ve seen a lot of new products being added to the market. It’s a great thing that different borrowers from different backgrounds are now having an opportunity to get loans, and so adding in that diversity is always a great thing,” said Chelsea Balak, vice president of operations with wemlo.

“Most people think it’s a tough market, it’s not normal,” said Darius James, president and CEO of Porch Point Mortgage. “But I think that’s just perspective. What I’m seeing is a lot of wins in this market, not just for my company but for loan officers nationwide.”

James added that if you, as a broker, target your business to make sure that customers have the right product linked with the right service and the right people, “to help those subsets, you can win in any market.”

Kevin DeLory, chief lending officer and partner at Equity Prime Mortgage (EPM), noted that it was a better market for borrowers.

“There’s more opportunity to do what’s best for the borrower,” said DeLory, as they can shop several vendors to find the best program with the best rates. “I’ve seen a huge opportunity for the smaller brokers, as they continue to grow, because they’re attracting that top talent away from retail, where there’s one option.” When it comes to rates, for example, a broker can negotiate that. “At EPM, we’ve doubled down on wholesale.”

For Jon Tallinger, chief growth officer, Class Valuation, a lot of people in the mortgage industry had to adjust to the market shift in 2021, when rates were low.

“Refinances were falling out of the sky,” said Tallinger. “We’re not back to normal yet, but there’s going to be a new normal eventually.” He agreed with his fellow panellists that it was important to get the emphasis back on what is best for borrowers.

But this has also become a time to separate the wheat from the chaff – to determine “who the winners are and who the losers are,” Tallinger said. “The truly driven originators are going to rise to the top,” thanks to a “thinning of the herd.”

The expanding role of technology

The uptake of technology was accelerated during the pandemic period, both out of necessity when people were mandated to work from home, but also as a chance to seize the moment. Since then, ChatGPT and other AI tools have been bringing what was once science fiction to your office. With the lockdowns behind us, what technological advances await the industry in 2024?

“I think technology is changing the entire world,” said James. “AI is really sweeping the mortgage industry.” The question now becomes how AI can be used to benefit the customer and also communicate better with consumers.

The way James looks at it, “I’m a consumer-first guy. I think that these things can help improve communication with the consumer and enhance the overall experience.”

His own team is working on AI internally and “it’s game-changing,” he said, in terms of how it can touch and help so many people.

EPM has just tripled its IT staff, according to DeLory, and the firm is working on creating a site where the broker can upload their loan and get approvals, and notify their account, as well as borrowers and realtors, all through a simple iPhone app.

“Everybody’s on the move, everybody’s on the go, especially in a market like this,” DeLory said. He recognizes that technology can be expensive: “We realize that, so we’re creating it to give it to them. Of course, in return, the loan comes back to us. We’ve got to get on the tech train, quick, and we’ve got to make it easy to use,” he said. “We’re doubling down. You’ve got to keep up, make it easier to use for the broker, or you’re going to get left behind.”

Tallinger’s firm works in the appraisal evaluation side of the industry, and works with every possible channel, making the process as seamless as possible. “There are so many good use cases where we can leverage AI and technology to help,” Tallinger said.

When Tallinger himself was out in the field appraising 15 years ago, he wanted to go through the house itself, taking pictures and seeing it all for himself. Now, technology exists through which far more information can be captured than ever before, and an appraiser does not need to be on-site to do that.

An appraiser, using the right technology, can work from home and get as many as five appraisals done in a day, as opposed to doing two in-person appraisals a day.

For Balak, with wemlo being a processing and technology company, “we are leaning very hard into the technology sector of what we do. We want to make sure that our processors can manage larger pipelines, and we’re doing that through technology.”

She agreed with Tallinger that delegating tasks was a good habit to get into, partially by using technology, so that more time can be spent communicating with brokers, loan officers, and borrowers.

Technology, however, cannot yet handle “building better relationships or explaining confusing things about loan processes to a borrower,” she said.

The place of loan originators in the market

Recent data has suggested that the number of loan originators may have been cut in half between 2022 and 2023, so this may be an opportunity for brokers to gain market share in the future.

“A lot of the order-takers are leaving the business,” said DeLory of these “Gary Goodtimes” types. When rates were low, they were busy with a steady stream of refinances. “I expect that when these rates come back down, you’ll see a lot of them running back to the business. When the going got tough, they got going. We don’t need them to be back in our business.”

His advice to the people he calls the real “heroes” in all of this – the mortgage advisors who are sticking it out?

“Don’t give them [the returnees] the opportunity to get back,” he said. “I think this is a good opportunity for the strong to get stronger.... It's up to the people who didn't run when the market got rough."

Tallinger agreed with DeLory that “winners win and the strong are going to survive.” Reputations are built in real time, they are “based on performance,” Tallinger said. His own advice for success? “Answer the damn phone. Honestly … are you available?”

In this current market, there is plenty of competition out there. “You don’t have to be talented. You don’t have to be good at a lot of things. That’s what your team is there is support you with. You don’t have to know every pricing scenario, but answer your phone, respond. Make sure your client has that trust, that you’re going to take care of them.”

Balak sees a lot of loan officers coming from the retail side, who were “handed deals over the table, and they’re not used to having to fight for things. Our wholesale brokers, they’re already implanted inside of our communities. They’ve built their relationships, they’re really built for this market and we’re going to continue to see them grow,” at the end of 2023 and into early 2024.

James recalled a mentor who taught him that when markets get compressed, that is when market share can be gained.

“How can you grow in a tough market? [It happens] because people leave,” James said.

Read the story on Mortgage Professional America here.

About wemlo

wemlo® NMLS #1853218, is a technology-focused mortgage loan processing company that is reshaping the mortgage broker channel. It developed the first service for mortgage brokers, combining third-party loan processing with an all-in-one digital platform. Its product is marketed and sold to mortgage brokerages and loan originators across the country. wemlo is a subsidiary of 
RE/MAX Holdings, Inc., which includes RE/MAX®, one of the world’s leading franchisors of real estate brokerage services, and 
Motto Mortgage®, the first-and-only national mortgage brokerage franchise brand in the U.S.

Media Contact

Brittany Johnson
PR & Communications Manager, wemlo