HousingWireHousingWire
Transitioning from the structure of a retail mortgage company and striking out on your own at an independent brokerage brings its own set of challenges — from selecting a tech stack to navigating unexpected hurdles and figuring out which resources to tap into.
For Stacey Melton, vice president of Arizona-based Reasy Financial, the broker journey began with a leap of faith — and a blind business date.
“I have a business partner, [and] we did not know each other. We had the same business coach … and the business coach was like, OK, I coach Stacy, I coach Jason [Servais]. You both are complaining about the same things. Maybe you two should meet each other.
“So we met each other and had all the same pain points, all the same visions, all the same core values of how we run our business,” Melton said about the formation of the shop. “We left our companies on Jan. 31, 2023, and started Reasy on Feb. 1.”
Personal perspectives
Melton, who didn’t bring any of her clients from her past position to the brokerage, admits that 2023 was a struggle to keep the business in the black. But at the start of 2024, she said the company took off, scaling up to 20 employees. She credits their success to partnering with United Wholesale Mortgage (UWM).
“UWM was definitely instrumental in our success and getting off the ground with being able to just hit the ground running,” she said. “I love everything that UWM supports and represents, and they want our clients to stay with us. Like, that’s what I love, that Mat [Ishbia] is never going to be consumer direct. He’s never going to take a client from any broker.”
Melton said a common misconception is that mortgage brokers don’t “have control” in a transaction.
“As a retailer, you have a box, and every loan that you send me, every buyer you send me, has to fit in that box,” she said. “All I have is this box and that interest rate. But when I become a broker, I no longer have to make your clients fit into this box — I can find the loan product for your client.”
Linus Thalman, CEO of Michigan-based Golden Mortgage, decided to move on from CrossCountry Mortgage and jump headfirst into the broker space in March 2024. He also chose to work with UWM.
“Once I started conversations with Mat and his team, it was refreshing to see that they’re like, ‘No, no, we want we work for you. We need to earn your business, because there are multiple options.’ So from a standpoint of who is going to be my preferred lender and fund a lot of my loans, it was an easy pick with [UWM],” Thalman said.
He added that from a profit-and-loss perspective, he’s doing better than if he’d stayed at a retail shop. “As far as my production goes … two years ago on the retail side [it] would take me five people — three loan partners in taking leads, a corporate branch processor, and I would I would need a closer,” he said.
Now, it’s just him and one loan partner, a lean operation that delivers the same output with a fraction of the overhead costs.
Blake Bianchi, CEO of venture-backed Future Mortgage in Idaho, started his company in 2021. Having previously owned another broker shop, Bianchi was an area manager for loanDepot before spreading his wings and forming Future.
“I would say that a majority of people start their own broker shops or go to the broker side because they want transparency and pricing,” he explained. “Most of the people transitioning are transitioning because the cost structures at retail lenders are very high, and the loan officers end up covering the cost of other parts of the company that have high costs.”
Bianchi’s company is described as “half lender and half broker with a technology division.” Its in-house customer relationship management and point-of-sale software, Clear (which Bianchi has been building for three years) has yet to launch, leaving the company to use ARIVE and software-as-a-service products.
The company, unlike Thalman’s and Melton’s, works with Rocket Mortgage.
“We like the flexibility that Rocket gives us,” he said. “I think that one of the hard parts about the broker side is that it costs a lot. Like, your pricing is usually much higher, but you do have a ton of support, right?
“And when you go broker, a lot of the big broker shops, the loan officers are on an island, and so they don’t get that it’s cheaper and you get a better rate, but maybe they don’t feel as much support. So for our brokerage, we offer a ton of support. … We give you all the resources of a retail company.”
Honing the broker shop craft
Melton said that becoming a broker often requires being a more “seasoned” loan officer.
“People who are just getting in the business I don’t think would go broker because they don’t know what they’re doing yet,” she said. “For us, the risk is too high. We don’t hire anybody who’s not experienced … because we don’t have time to change and train anybody. I think newer people getting in probably start with retail, which is great to cut your teeth.”
Bianchi agrees. “The barrier to entry to start a mortgage brokerage is fairly easy, and a lot of people try to do it, but they come to realize there’s a lot of capital involved in scaling a company.
“So, like, if they ever want to grow their brokerage, it doesn’t cost them a lot of time and money. And then the audits we get as a brokerage, we get audits every four or five, six months. … It becomes a full-time job for me just to get through these audits.
“I think people start brokerages thinking that they’re going to make a ton more money doing it, and then they kind of realize a lot of the trade-off for how much time you have to put into running the brokerage maybe is not as beneficial as just joining a brokerage that’s already set up.
“… LOs are better off joining a brokerage already offering all the support, and just doing a DBA or creating their own branding.”
