FAQ BRAWL ’ S VS . WHOLE-TAIL LENDERS
MORTGAGE BROKERS TAKE ON WHOLESALER LENDERS
BROKERS SAY WHOLESALERS USE THEM FOR LEAD GENERATION , THEN STEAL CLIENTS
WHEN MORTGAGE brokers discovered that some of the wholesale lenders they ’ d been steering clients to were allegedly trying to steal those clients from the brokers , a BRAWL ( Brokers Rallying Against Whole-tail Lenders ) broke out .
BRAWL is not an organization , but a movement , said founder Anthony Casa , who is also president of Garden State Home Loans in New Jersey . BRAWL defines “ whole-tail ” lenders as “ lenders that pose as wholesale lenders , but steal business away from brokers by retaining loans and repurposing them for their retail division . Their wholesale divisions are merely leadgeneration tools for retail loan originators , as they buy customers for life by initially offering pricing incentives .”
When mortgage interest rates started falling , Casa discovered the wholesale lenders he had been working with were marketing directly to the customers he brought them . When he and his team contacted their clients to encourage them to refinance at lower rates , he found many had already done so , often with that same wholesaler , a practice known as “ churning .”
“ They ’ ve been growing their businesses on the backs of mortgage brokers and it has reached a predatory level ,” he said .
When he started with other brokers , they realized the problem was widespread . BRAWL was born in September 2017 and the fight was on . Casa said he has more than 11,000 supporter email addresses in the groups ’ database , all from within the mortgage community .
He sought assistance from the National Association of Mortgage Brokers , which he assumed would be an ally , but the organization declined to get involved . In an undated letter to NAMB conference sponsors , speakers , and exhibitors , NAMB president John G . Stevens wrote , “ The entire mission and purpose of BRAWL is to organize a group boycott by mortgage brokers of certain lenders that the BRAWL organizers refer to as ‘ whole-tail lenders ’ or ‘ whole-tailers .’”
Stevens went on to quote an open letter from BRAWL , which read , “ Let ’ s pledge to partner only with true wholesale lenders until the whole-tailers put an end to their selfish and greedy ways .”
A spokesman for NAMB did not respond to requests for comment . A Movement , Not a Boycott The movement is not a boycott , Casa said ; it ’ s about making wholesale lenders business practices transparent , so brokers can make informed choices about who to do business with . He has consulted with an anti-trust attorney , who assures him he ’ s on solid legal footing . He said the real reason NAMB wouldn ’ t get involved is because many NAMB members work for wholesalers .
“ BRAWL is not about boycotting lenders ,” Casa wrote in an open letter response to Stevens . “ It is about bringing transparency and disclosure of lenders practices to the mortgage broker community . We are in communication with the same wholesale lenders that betrayed our trust and repurposed our past customers for their own benefit . We are proactively working with those lenders on improving their wholesale platforms to support and protect mortgage brokers moving forward . Are we demanding for lenders to stop predatory churning practices ? You ’ re damn right we are and so are regulators .”
When NAMB wouldn ’ t help him , Casa decided to form a trade group , the Association of Independent Mortgage Experts . Casa is chairman of the group , which will represent the interests of mortgage brokers and share best practices to “ with a growth-focused strategy , providing tools and resources to propel the wholesale channel beyond 20 percent share of the mortgage market by 2020 .”
BRAWL surveyed wholesale lenders about their business practices and compiled data from public and private sources . It now publishes a ranked list of wholesale lenders based on how fairly the wholesale lenders treat mortgage brokers . The rankings are updated quarterly and lenders can move up or down that list with changes in their practices .
Loan Depot recently ranked among the lowest . When asked for comment , a Loan Depot representative said the company would not participate in stories about this topic .
Fairway Independent Mortgage also ranked near the bottom . It did not respond to a request for comment .
Caliber , the second largest wholesale lender in the country , also came in near the bottom , but on March 16 it released a new version of a program called Caliber Reconnect , which John Gibson , Caliber ’ s senior vice president and head of wholesale production , said is an enhanced version of a program originally released in December 2016 .
“ We wanted to be better business partners to our broker partners ,” Gibson said . “ We service about 97 percent of the loans we make which gives us the ability to look at modeling and analytics and help
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