Guide: The New Competitive Differentiator in Wholesale-Broker Relationships

Become Brokers’ Partner of Choice with Technology Made to Create Borrowers for Life

The wholesale mortgage industry is on the cusp of a new competitive value offering for brokers. With retail lenders utilizing borrower data and insights to drive massive increases in retention, brokers now need wholesale partners that will support them in the race to serve borrower needs. The first wholesalers to utilize technology to drive customer-for-life relationships between brokers and borrowers will reap the rewards of more originations – both from current partner brokers, and from new ones.

Brokers face the same financial pressures in today’s market as do retail lenders. Squeezed by margin compression, they need a way to find every possible loan opportunity offered by their customer base. While refinance activity has returned for a time, brokers will soon shift back to their bread-and-butter business: purchase loans. As they shift, retaining business will become their first priority.

Wholesaler lenders have the opportunity now to be the hero. They can solve brokers’ retention challenges with customer-for-life technology. The value of the partnership will go straight to brokers’ bottom line by supporting origination volume and ultimately their profitability.  

The Data Arms Race

 Brokers and retail loan officers compete for originations every year. In that competition, brokers are pitted against the retail loan officers of other lenders – loan officers that benefit from significant technology investments in knowing borrowers and engaging them about their needs.

Brokers’ competitive disadvantage is increasing because of what Total Expert Founder and CEO, Joe Welu, calls the “data arms race” in the mortgage industry. All lenders are making aggressive technology investments with one goal in mind: Win the borrower by knowing them better, serving them better, and reaching them first.

Take the late summer and fall of 2021 as an example. Experts are terming it the “golden age of the cash-out refinance.”1 Brokers compete with retail lenders using a full suite of technology that utilizes data from loan officers’ past borrowers, even borrowers in servicing, who are prime candidates for cash-out refinances because they have tappable equity, an in-range credit score, or a rate above market.

The message sent to borrowers by tech-enabled retail lenders will be personalized to their unique loan opportunity. The message, though, will be even more personalized as it will speak to the intentions behind a borrower’s interest in a cash-out refinance. Examples include content that suggests desires like home improvement, eliminating floating rate debt, or creating investment capital. Borrowers’ interactions with these highly personalized messages will be tracked by the lenders’ technology and will inform automated follow-up.  

Tech-enabled retail lenders’ advantage doesn’t even end there. Their systems also queue the handoff from marketing to loan officers based on borrower response; loan officers enter those conversations with the borrowers’ desired outcome already in mind. Supposing a broker learns that a borrower is looking for a refinance, their message will be “Hello, just checking in to see if you need a loan.” They are competing with retail loan officers, on the other hand, who will know the borrower need, make contact, and follow up with “Hi John, I noticed you might be interested in getting your student debt refinanced onto a fixed-rate loan during this time of historically low rates.”

Brokers need wholesale partners that will help them anticipate and respond to borrowers’ needs as they compete in a more and more data-driven market.

Broker Parity, Wholesale Differentiator

Mortgage retention is a cumulative strategy because it results in return business. Wholesale lenders, though, benefit doubly from it.  

Based on a study by Forrester, which aggregated six Total Expert customers into one mortgage company with 300 loan officers,2 loan officers increased their origination volume by 3.28 loans in the first year of using customer-for-life technology, and to 5.9 loans per loan officer by the third year. Based upon an average $225,000 loan amount and an average profit of $3,500 per loan, the lender’s annual gross profit increased by $1.5 million in year one, and to nearly $3.1 million by year three.

Now, imagine that both the number of loans per broker expanded and the number of loan officers also expanded. With a growth story that is really about the success of brokers, a wholesaler providing customer-for-life technology will have one of the most enticing offerings in the market to date, especially when paired with a promise not to poach borrowers.

The first wholesalers to invite their brokers to this kind of success story will become magnets within the industry.


1. The Golden Age of Cashout Refinance

2. A Forrester Total Economic Impact Study, “The Total Economic Impact of the Total Expert Marketing Operating System (MOS).” September 2019.

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