Wholesale leader on facing the “worst years for mortgage banking”

For Homepoint, this adjustment has happened well in advance.

“Back in 2018, we felt like wholesale was going to win,” said Newman, who recalled how Homepoint backed up this intuition with significant research, allowing the company to be better equipped for the volatility of today’s market compared to large retail lenders.

“We now have irrefutable evidence, based on the data, that mortgage brokers provide a lower upfront cost and lower rates than retail lending,” Newman added. “So, to me, the opportunity in a declining market is for those who are interested in navigating through it.”

This attitude toward business adversity was one of the many lessons imparted to Newman by his mentor, Stan Rhoades. The idea that challenges and dislocations create space for opportunity is a guiding principle for the so-called godfather of wholesale lending, who described his entry into the business as a “massive dislocation saving the loan crisis.”

“Lots of loan officers disintermediated away from their companies. And it was a great opportunity for us to build a business,” he said. “I think today we’re in the middle of a significant dislocation in our business and to me it’s a challenge to navigate through it, but it does create an opportunity coming out the other end.”