Author: Brian Brady (page 1 of 27)

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

December 20, 2022

I never lose.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

It’s no secret that I am a Tom Brady fan. I admire him because of his commitment to excellence and because he competes hard. His off-field conditioning is maniacal but, at 45 years old, he has taught the next generation of NFL greats that self-care is what leads to longevity in the highly physical game of professional football. Brady prepares the way he does to win, and Brady wins.

As much as Brady wins, like it or not, not winning is a part of competing. He said as much yesterday, on his podcast:

“It’s interesting because you would think, ‘Oh, well, why is he still playing?’ Because all you want to do is win, and that’s all sports should be about is winning. And I agree it should be about winning, but it’s also, I’m looking at it like, no, what am I learning? What am I learning from putting a similar amount of energy in over the last couple years and not winning? What is that teaching me?” Brady said Monday on his SiriusXM podcast, “Let’s Go!”

This was the money line:

“You know, why should we feel like we’re just entitled to win all the time? We’re not. That’s not what life’s about.”

I know you have heard this Nelson Mandela quote, “I never lose; I either win or learn”. It may be trite but it’s true. Don’t use the word “lose”, ever again, when talking about business opportunities.

I have been self-employed or selling on commission since 1992. I am not kidding when I say that, in the past 30 years, I have never received a biweekly or monthly paycheck. I have been issued 1099 forms, each January, since 1997. It hasn’t always been easy but I have paid health insurance, paid car insurance, sent my daughter to private schools from Kindergarten through her senior year in college, and maintained two houses: one in San Diego and one in my present state of residence, Florida. I am bragging a bit but I am bragging to illustrate this point;

I don’t always win.

In fact, I win less engagements than I don’t win but, whether I win or Read more

November 22, 2022

Get up. Get Out. Get Contacts. Get Paid.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

If you are following my journey, we moved to Tampa/St Pete FL last year. We still have a home in San Diego but spend most of the year in Florida. The reasons are plentiful but, when COVID lockdowns hit, it gave me a chance to start a new “product line” (commercial real estate loans) in a new location. The move isn’t without challenges. Although I can lend nationwide, most folks want to work with a local lender unless they have a prior personal relationship.

How did I parachute into Florida and build up a profitable mortgage brokerage business in 15 months?

1- I worked my inactive client database.
2- I added Florida agents, whom I met at industry happy hours, to my weekly email list
3- I try call 5 inactive clients and 5 agents daily. Few people answer their phones now so I usually end up leaving messages.

Last year started off really well. Our Florida purchase volume was about half of our California purchase volume. My goal for 2022 was to have our Florida volume to exceed of our California volume. 2022 was shaping up well until St Patrick’s Day-volume got weaker through Memorial Day, then even weaker by Labor Day, then it damned near dried up through now (Thanksgiving).

A month ago, I decided to try something different. Calling agents and inactive clients is still a daily discipline but it gets depressing when few calls are answered. I decided to do some “in-person canvassing”, one day each week, to meet business owners in and around St Petersburg. Pinellas County is a hodgepodge of independent businesses so I decided to make a goal of having 25 conversations each day, each time I went out.

First, I went to the charming seaside village of Dunedin. The local Chamber of Commerce gave me a map of 145 businesses within one square mile. I met:

-8 real estate agents,
-6 bar/pub/restaurant owners, and
-13 shop owners.

16 of those people owned a home and 2 owned investment properties. 12 people gave me permission to email them a bi-weekly newsletter. 4 of them said they would like to own investment properties.

Last week, I visited Read more

June 8, 2022

Why won’t people move?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

The housing market is “stuck”. Higher mortgage rates and the fear of higher property taxes cause Boomers and Millennials to “hunker down” rather than move to new homes. Reverse mortgages might offer a solution to this problem. Today, 2 out of 3 Baby Boomers are rejecting retirement communities and “aging in place”:

Today, 66% of this population report that they plan to age in place. Little changed from 2016, when 63% said the same. Given their reported financial gains in the past five years, however, they may be more equipped to do so.

When asked when they expect to move next, 27% feel confident they would move again, while 36% believe they will not move and 37% simply don’t know. These data suggest this population is in no rush to leave their current homes.

Regardless of their plans to move or age in place, 66% of survey respondents say they expect their home to need some degree of renovations to make the space livable for the long term if they were to age in place. Between personal savings and longer-term retirement and investment accounts, those who think they would need renovations to age in place say they are confident they could afford them.

This is both a problem and opportunity for real estate agents and brokers. Boomers own many of the “move-up” homes their children covet but can’t afford. Millennials might love to sell their $500,000 homes, and trade up to a $700,000 home but are locked in to sub 3% mortgage rates in a 5.5% mortgage rate environment. Let me break down the sticker shock the millennials are facing:

Millennial family buys a home for $350K, in 2016, with a 4.75% FHA mortgage rate and a monthly PITI of $2400. In 2021, they refinanced that mortgage to a 2.75% conventional loan with a monthly PITI of $1700, retaining over $200K in equity (which could be used for a down payment on a $700,000 home. There are two problems today: that $700,000 home is now $800,000 and mortgage rates are at 5.5%. If they sold their smaller homes, used their home equity as a down Read more

May 15, 2022

2023 Housing Bubble or 2024 Real Estate Boom?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Zillow “creates” digital home valuations and The Fed “creates” digital currency so it’s not like we are dealing with credible institutions BUT:

The Dallas Fed is worried that housing is overvalued.

Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals.

Zillow predicts continued housing price appreciation

No, and in fact, the expectation of another crash could contribute to keeping homes so unaffordable. Builders have been firing on all cylinders, and with more homes under construction than any time since 1973, they understandably feel exposed in the event of a housing downturn. If they trim their construction plans out of caution, we will miss out on one of the best hopes we have for net new inventory on the market, and the inventory crunch that’s helped push prices up will persist for longer than expected.

Pick your poison but keep these two things in mind: The Fed created this housing “boom” and Zillow executives aren’t practicing what its economists are preaching

May 6, 2022

Don’t drop that listing price just yet!

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Southern California, agents are telling me that homebuyer enthusiasm has dropped quickly. More homes are on caravan and some are starting to reduce listing prices to get the home sold. Tampa Bay area agents are whispering the same. And while the US Home Price Index rose 2%, year over year, we see price reductions in over 30% of the cities across the country.

This is no surprise to me. Mortgage rates doubled in the past 6 months with a big move upwards in the past 60 days. That, combined with the rapid increase in home prices since the pandemic started has severely impacted housing affordability. With less buyers buying, and sellers looking for unrealistic prices, agents are pleading with sellers to drop their listing price. You can offer your seller a couple of options BEFORE you drop that price:

1- If the home is secured with a low-interest VA or FHA mortgage, you can highlight that those loans are assumable in the marketing remarks. This Safety Harbor listing offers an assumable loan, at 2.25%–half of what most lenders are offer today.
2- Offering a seller-buydown of the mortgage rate could save the seller some money. I run through the numbers of a seller-buydown in this video. This is a great response to a low offer.

I will be hosting a Realtor Happy Hour, in St Pete Beach, FL, on Thursday May 12, 2022.
I am hosting an Agents Helping Agents event, in Tampa, FL, on Wednesday, May 18, 2022.
Stay tuned if you are in San Diego. I will be hosting an Agents Helping Agents event in mid June.

April 27, 2022

Need More Listings? Check Your Inbox

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

If you know me, you know that I am a fan of the Millionaire Real Estate Agent book by Gary Keller. His high touch marketing, to people you know, is a proven way to generate seller leads. Why aren’t more people deploying the 36-touch strategy then?

Three reasons why Realtors aren’t doing this are:

1- it’s hard

2- it’s onerous

3- call reluctance

Let’s face it– you probably don’t have a formal “database” which you nourish and grow and it’s probably because of one or two of those three reasons. This is what I did:

I set up a Homebot account for my past clients and encouraged my Realtor partners to set up one for their database (Realtors need to be sponsored by a lender so ask me how you can do this). Mega San Diego/Phoenix real estate agent John Gluch shows you how he uses Homebot in this 6-minute video.

Then…do two things:

1- call 5 homeowners daily who aren’t in your Homebot database and get them entered

2- call everyone who opens the sticky Homebot monthly emails and ask them for a referral.

If you do this, you will have close to 1000 homeowners in your database and will have asked for some 500 referrals in the next year.

It’s simple but not easy. If you want to make the “simple” easier, send me a message and I will get you a demonstration of Homebot, scripts for the calls, and sponsor you.

April 14, 2022

Lenders can help Realtors get offers accepted in a competitive market

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Most buyers find themselves in a multiple offer situation in today’s market. While the highest price often wins the home, other factors come into play–some buyers are waiving appraisal, loan, and even inspection contingencies. Selling agents who want to protect their buyers, while affording them an “edge” against competing offers, are encouraging listing agents to contact the lender directly.

We think you can be more proactive than that. Here are five tips for Realtors about how to use a great lender to get your offer accepted:

1- Use a reputable mortgage broker, not a lender. (see why here) Both the originator and the mortgage company should have review pages, whether they are on Yelp, LinkedIn, or Lending Tree.

2- Use a loan officer with exceptional communication skills. If you want to test those skills, call him/her. If he or she doesn’t answer the phone, leave a voicemail and send a brief text. If you don’t get a text back or return call within an hour, you have the wrong guy or gal. That includes weekends. YOU work on weekends; so should loan officers. You should expect the originator to be responsive, Monday through Friday, 830AM to 7PM and 12PM to 5PM on Saturdays and Sundays

3- Make sure your buyer is pre-approved rather than pre-qualified. This means that the credit has been pulled, income and assets were analyzed and verified, and the file has DU approval findings in it. The pre-approval letter should address all of those issues in the body of the letter.

4- Have the originator call the listing agent and offer to do the following: speak with an originator the listing agent trusts, to review the loan approval or, if desired, speak directly to the seller. The originator should speak frankly and honestly about the contingency removals iin the contract and explain which ones might be difficult to meet. Be wary of the originator who makes promises which he/she knows can’t be kept. Underwriting approval time is easily determined but the originator has little to no control over the appraiser.

5- Have a plan to deal with a low appraisal and have the originator Read more

April 11, 2022

Am I charging enough rent for my investment property?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

I don’t need to tell you that housing inventory is tight. Buyer agents are having a hard time earning a living today while listing agents are finding more and more competition.
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One thing you can do is to prospect out-of-state investors and offer one free service for them– comparable rent analysis. Rents are rapidly rising and most investors aren’t keeping up with the market.
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Many out-of-state investors are former residents; they lived here, moved to another state, and hold the property as an investment. While some Realtors are focused on telling homeowners and investors what their property is worth, hardly any are speaking with investors about what they could be earning from their home.
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I subscribe to two services to help me offer my expertise to investors:
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Rentometer offers a quick, easy, report, which you can generate with your branding, showing the comparable rents for the property. It costs less than $100 annually.
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A more proactive approach is to subscribe to Homebot. Homebot keeps you in touch with past clients and prospects by sending them a monthly homeowners digest, showing them data on property valuation, rent estimates, AirBnB analysis, potential homeowners equity, possible move-up potential, and a whole bunch more. It’s VERY sticky– My Homebot email open rate is north of 70%. Homebot offers real estate agents a free version and the full service costs about $25/month. You must be sponsored by a lender to subscribe to the free or upgraded version so, if you want to see how it works, just hit reply and ask me to sponsor you.
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Out-of-state investors have made money on their property and may want to sell for two reasons: they want out real estate as an investment OR they want to invest in another area with a higher capitalization rate. You can grab their attention by offering something other agents won’t offer– a comparable rental analysis. After you perform the analysis, you can keep that data, and your name in front of them, every single month. That is going to earn YOU more listings

April 1, 2022

This Realtor found his buyer a property with no multiple offers

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Are you representing buyers right now? It’s hard…REALLY hard right now. You show 8-10 homes on the weekend, your buyers get excited about one of those homes, you make an offer on Sunday night, a seller multiple counter-offer comes out Monday night, your buyer offers a price which is above their comfort zone on Tuesday, and they find out Wednesday that they didn’t get the home.

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Rinse and repeat. For weeks.

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Maybe the buyers get more aggressive and ultimately get an offer accepted but often, they just give up and say “it’s too hard right now”. Even worse, YOU give up.

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Realtor Cameron Hodge is one of my favorite new agents. He is licensed in both CA And FL and he hustles hard. I often finance his buyers and we were working with a zero-down VA buyer. He showed the buyers homes for three weeks, made 3-4 offers, and lost out.

The buyer gave up but Cameron didn’t give up on him.

Cameron drove the neighborhoods looking for FSBO signs…and he found one.. right around the corner from a home they just lost to a higher bidder. Cameron banged on the door, spoke with the seller, scheduled a buyer tour…and tied the home up, with an accepted offer, a day BEFORE the buyer toured the home.

Right before the offer was accepted, another offer came in but Cameron asked the seller how his buyer could win the deal. He discovered that the seller didn’t want to perform what amounted to a couple thousand dollar repair. The buyer assumed that responsibility and entered escrow.

Debra and I funded the loan for this buyer. The house appraised HIGHER than the contract price, the repair wasn’t required by the appraiser (but still needs to be done), and the transaction closed about two weeks ago.

Don’t believe me. Let Cameron tell you all about it in this video (starts at 2:55 and ends at 10:00)

If you subscribe to my weekly emails, you have heard how worried I am about the future of real estate brokerage, I implored you to shift your efforts to listings. To do that, you are going to have to talk Read more

July 17, 2021

Buyer Agency Project: Buyer agents offer no value today.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

“I just showed three houses this week, out in L******, and all of them had 2% co-brokerage fees. Learn to sell, listing agents”

I read this post (paraphrased), from a former car salesman with a Florida real estate license, in a Facebook group the other day. The irony of it was too delicious to pass up so I responded with something like this:

“It is laughable to watch an agent, who can’t sell a buyer on the value of his services, complain about the fact that his compensation is set by another real estate agent. Sell your value to your buyer, charge a fee for the services you will provide, disclose how that buyer brokerage fee will be paid, and negotiate a contract which pays you that fee in a manner which benefits your client”.

I may have taken a snarky swipe at the original poster but I don’t remember because he deleted the thread. Good. I am sure the guy was just airing his frustrations but that sort of weak sauce is the last thing I would want on the internet if I were him.

Let’s talk about the REALITY of real estate brokerage in 2021:

1- While price appreciation may have slowed, the real estate market still has a supply/demand imbalance. This means that homeowners can negotiate lower commissions to sell their homes.
2- Listing agents, with the right property, have little to no need for buyer agents today. If it is priced at fair market value, entered properly in the MLS, and aggregated across all of the realty bots, buyers will line up to tour the home. Thus, paying a co-brokerage fee of more than $1 seems like a giant waste of money.
3- The US Department of Justice doesn’t like this at all and the National Association of Realtors has lost any power to perpetuate the existing compensation model. Expect buyer brokerage compensation to change.

Every time this subject comes up, buyer agents wail and grind their teeth. The most common comments I read are “It’s so hard to work with buyers nowadays, I DESERVE to get paid more; I practically work for minimum wage”. Read more

June 6, 2021

Get over yourself and start living

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

We speak a lot to real estate agents and lenders here on Bloodhound Blog. We hope (and know) that consumers read our work because we think you can learn a lot when you watch “industry folk” interact with one another. We’re a fast crowd here– we challenge the status quo a lot.

Today, I want to talk to you, the watching consumer and I am going to speak directly to your fears about buying, owning, and/or selling a home. I am not going to get into the weeds of your personal situation but I want to highlight one thing. You CAN own a home in this country and most everybody who writes on Bloodhound Blog can help you.

Today is the anniversary of D-Day. War is never anything to be celebrated but we can learn a lot from those who wage war.

June 6, 1944

You are about to embark upon the Great Crusade, toward which we have striven these many months. The eyes of the world are upon you. The hopes and prayers of liberty-loving people everywhere march with you. In company with our brave Allies and brothers-in-arms on other Fronts you will bring about the destruction of the German war machine, the elimination of Nazi tyranny over oppressed peoples of Europe, and security for ourselves in a free world.

Your task will not be an easy one. Your enemy is well trained, well equipped and battle-hardened. He will fight savagely.

But this is the year 1944. Much has happened since the Nazi triumphs of 1940-41. The United Nations have inflicted upon the Germans great defeats, in open battle, man-to-man. Our air offensive has seriously reduced their strength in the air and their capacity to wage war on the ground. Our Home Fronts have given us an overwhelming superiority in weapons and munitions of war, and placed at our disposal great reserves of trained fighting men. The tide has turned. The free men of the world are marching together to victory.

I have full confidence in your courage, devotion to duty, and skill in battle. We will accept nothing less than full victory.

Good Luck!

And let us all Read more

April 25, 2021

How To Fix Florida Homeowner’s Insurance Costs

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

This morning, The Wall Street Journal sounded the alarm about the ticking time bomb in Florida real estate. It’s behind a paywall but I will try to highlight some key points for you:

1- Florida homeowner insurance premiums are increasing by a double-digit percentage
2- Insurance companies are withdrawing from Florida market because of catastrophic costs (hurricanes, etc)
3- Republicans in the Florida Legislature want to solve the problem with tort reform
4- Democrats in the Florida Legislature don’t want to remove ability to litigate
5- Neither address the fact that beachfront property insurance is heavily subsidized by taxpayers

Why would this arrest or reverse the Florida real estate boom? While there has certainly been an increase in all-cash transactions, most properties in Florida are purchased with financing. Mortgage companies will require certain property insurance coverage as a condition of approval and underwrite new loans with those (increased) costs analyzed. Let me break that down for you:

Let’s consider a median-priced, single-family home in Pinellas County FL, selling for $295,000. Someone could buy that home, with an FHA loan with a 3.6% APR, with $18,000 for a down payment and closing costs. The monthly payment would be about $1750. A family with the Pinellas County median household income of $5000/month can afford that with a 35% housing ratio.

Now, let’s double the homeowners insurance, from $150/mo to $300/mo and add .5 % to the mortgage annual percentage rate. The monthly payment jumps to just under $2000, and increases the housing ratio to 40%. Unless the median family income jumps to $69,000, there will be less buyers for the home, currently priced at $295,000. If incomes are stagnant, the higher mortgage rate (likely) and the doubling of the homeowners insurance costs will drive the price down to $265,000.

A drop in prices may be unlikely because of the nationwide supply/demand imbalance but it’s likely that Florida property prices may flatten for a few years.

What’s the solution? More market, less government..

Let’s start here; do away with the National Flood Insurance Program. If we can’t “close it”, seriously reform it. NFIP is a wealth transfer from working-class homeowners to upper middle-class beachfront Read more

March 10, 2021

Young People Are Moving To Red States

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Greg nailed it today (and before)– people are leaving America’s cities and it ain’t cuz of COVID. Studies like this one go out of their way to explain that New York and San Francisco are “Safe” and attribute the exodus to financial reasons. But if you read THIS study, by the Cleveland Fed, you’ll see that Greg is right:

Initially, the urban exodus stories reported that people were afraid of contracting the novel coronavirus in elevators and subways. Then the narratives suggested remote work had freed office workers from long commutes, allowing them to relocate. With both remote workers and students at home full time, a desire for home offices purportedly rose, and low interest rates made buying a larger suburban home attractive. Urban amenities such as restaurants and theaters were shuttered. Later, the protests sparked by the killing of George Floyd and others were cited for motivating some urban residents to leave. Most major cities experienced increases in violent crime during 2020, and crime rates have historically predicted migration changes.² The proposed and enacted cuts to police funding were also cited as a reason to leave by some people who feared that crime would increase further.

The Wuhan virus didn’t directly cause the urban exodus, it was the political responses to it. When big city mayors defund police departments, refuse to deploy the police to shut down riots, and decriminalize property crime and drug use, people won’t move there. IN both studies, they cited that it wasn’t so much that a lot of people are moving OUT, it was that new people weren’t moving IN. Thus, net migration from blue states is high and net migration to red states is up.

Take a look at the net migration map from North American Van Lines. It has a very cool slider which allows you to watch the net migration for the last ten years. The colors are inverted, probably so that North American Van Lines doesn’t get hammered by the woke folks, but in each year since 2010, net migration is flowing from states governed by Democrats to states governed by Republicans.

In 2020, 4 of Read more

March 8, 2021

Can a veteran buyer waive an appraisal when purchasing with a VA mortgage?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Welcome to 2021 where offers are made above listing price and, to win the deal, the buyer waives the appraisal. When I was hired as a listing broker, I was able to get two of the offers to waive the appraisal by asking their respective lenders to run the desktop underwriter program and try to obtain an appraisal waiver. Those were offers with owner-occupied, 25% down payment conventional loans.

VA mortgages make some sellers wary because they require a document to be signed called the VA Amendatory Clause. If you are a California agent/broker, we call that form the FVAC and it is in your ZipForms of Glide forms under FHA/VA Amendatory Clause. It must be executed, with the accurate contract price, and signed by the buyers, sellers, and both real estate agents. It is part of the contract because it’s technically an Amendment. Why does this amendatory form “scare” sellers? This language may be why:

It is expressly agreed that notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise unless the purchaser has been given in accordance with HUD/FHA or VA requirements a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement Lender, setting forth the appraised value of the property of not less than $ _________. The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or the condition of the property. The purchaser should satisfy himself/herself that the price and condition of the property are acceptable

What that means is that the veteran buyer does not have to follow through with the purchase if the property appraises below the purchase price. The veteran is ALLOWED to come in with the difference between the lower purchase price and appraised Read more

March 4, 2021

Mat Ishbia draws a line in the sand; do business with Rocket Mortgage and you won’t do business with UWM

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

The dynamic CEO of United Wholesale Mortgage, Mat Ishbia laid down an ultimatum to the mortgage broker channel today. Ishbia said, in a conference call with members of the Association of Independent Mortgage Experts (AIME), that mortgage brokerages who choose to fund loans through Quicken’s Rocket Mortgage will no longer be approved with United Wholesale Mortgage (UWM). I believe he laid down the same ultimatum with competitor Fairway Mortgage.

WATCH: What is the difference between a bank, lender, and mortgage broker?

The bad guys

Let’s start with this: Rocket Mortgage is to the mortgage brokerage channel what Zillow is to the real estate industry– a predator. Like Zillow, Rocket Mortgage approached the mortgage brokerage channel with great pricing causing many mortgage brokers to send loans to it. Its service stinks, its underwriting department isn’t knowledgeable, and it “cherry picks” all of the best borrowers. More importantly, Rocket Mortgage starts marketing to the mortgage brokers’ customers the day after they close their loan, attempting to render the originating broker useless. Rocket Mortgage sets itself up as a direct competitor to the mortgage broker the minute it pays the mortgage broker for the loan origination. Additionally, Rocket Mortgage solicits the real estate agents involved with the transaction to become part-time Quicken Loans mortgage originators. Ultimately, Rocket Mortgage is following the Zillow model and trying to eliminate real estate agents and mortgage brokers from the transaction.

Economies of scale let tech-centric companies like Zillow and Quicken compress margins and deliver lower costs to the consumer. That’s competition and competition is good, right? Wrong. Quicken’s retail lending arm is almost always more expensive than an independent mortgage broker and neither Zillow nor Quicken have the local expertise and fiduciary duty a local real estate broker has.

The good guy

UWM is mortgage broker-centric and Mat Ishbia is a cheerleader for the independent mortgage broker channel. UWM’s predecessor, Shore Mortgage was founded by his father, Jeff Ishbia in the mid 1980s. Mat was a member of Michigan State’s NCAA Championship basketball team in 2000 under coach Tom Izzo. After graduating Michigan State, Mat went to work for UWM as a wholesale account Read more

Author: Brian Brady (page 1 of 27)

I never lose.

by Brian Brady

Get up. Get Out. Get Contacts. Get Paid.

by Brian Brady

Why won’t people move?

by Brian Brady

2023 Housing Bubble or 2024 Real Estate Boom?

by Brian Brady

Don’t drop that listing price just yet!

by Brian Brady

Need More Listings? Check Your Inbox

by Brian Brady

Lenders can help Realtors get offers accepted in a competitive market

by Brian Brady

Am I charging enough rent for my investment property?

by Brian Brady

This Realtor found his buyer a property with no multiple offers

by Brian Brady

Buyer Agency Project: Buyer agents offer no value today.

by Brian Brady

Get over yourself and start living

by Brian Brady

How To Fix Florida Homeowner’s Insurance Costs

by Brian Brady

Young People Are Moving To Red States

by Brian Brady

Can a veteran buyer waive an appraisal when purchasing with a VA mortgage?

by Brian Brady

Mat Ishbia draws a line in the sand; do business with Rocket Mortgage and you won’t do business with UWM

by Brian Brady

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