Freedom Mortgage's head of wholesale lending on growth plans for 2023
December 21, 2022 5:00 AM
But with interest rates doubling from last year, the wholesale channel has suffered most. Numerous lenders, such as
In the midst of all this divestment, Freedom Mortgage announced in October the promotion of Mike Mell to serve as a senior vice president of wholesale lending.
With over 17 years of experience at Freedom Mortgage, Mell sees a path forward for the wholesale channel and is optimistic that he will be able to grow it, despite headwinds.
Coming into this role, what was your vision for the company’s wholesale division? What areas needed more focus?
The obvious thing is that the market is pretty challenging right now. Not only for Freedom, but for everybody out there. It's been a rough second half of the year.
When I first got into the role, my main focus was to keep Freedom's commitment on what we've been really strong in in the past, which has been our efforts in government lending. That's really our bread and butter going back to forever. Helping the underserved market and veterans is where our expertise is.
When I first got into the role, my main focus was to keep Freedom's commitment on what we've been really strong in in the past, which has been our efforts in government lending. That's really our bread and butter going back to forever. Helping the underserved market and veterans is where our expertise is.
What strategies are you implementing to grow Freedom’s wholesale division? Have you seen an increase in brokers that are working with Freedom at this time?
We have always had a group of brokers that are very loyal. We don't have 15,000 brokers in America, or 10,000. We aren't in that position. But we see an opportunity to reach out to brokers that are not signed up with us. The market is tough, we need more funding and brokers need more outlets…you've seen so many wholesale lenders and retail lenders that have fallen off. Freedom is very stable and we've been in this industry for a very long time.
We reached out to a lot of brokers over the past couple of years, but they were more focused on conventional mortgages and people refinancing. During the COVID-19 years, it was hard to even get an FHA or VA contract approved, but that has changed now and these contracts are now in the ball game. That's where we see the opportunity to grow our business.
We reached out to a lot of brokers over the past couple of years, but they were more focused on conventional mortgages and people refinancing. During the COVID-19 years, it was hard to even get an FHA or VA contract approved, but that has changed now and these contracts are now in the ball game. That's where we see the opportunity to grow our business.
Is Freedom relying on any particular platform to reach out to new brokers?
We are utilizing our account executives and their networking to bring on new brokers. So our focus is doing that and identifying the brokers that are doing government business. We're sending our account executives out to do that.
Many lenders are rightsizing their operations to stay competitive in this market. How has that impacted your vision of growing the wholesale division?
That's a good question. It's a challenging market and our goal at this time is to be smart about what we're doing. We can't go all in at this point in time, which is why we're focused on what we're good at and that is servicing FHA and VA borrowers. I think that in 2023, there will be a good opportunity for us to grow.
A lot of big lenders in the industry have announced that they’re cutting their wholesale divisions, including loanDepot, Guaranteed Rate, and Finance of America. Do these headlines make you re-evaluate how you approach growing Freedom’s wholesale division?
A lot of these lenders were trying to be aggressive everywhere. The market has been very difficult, in part because some large wholesale players have been very aggressive, and there's a price war that we're dealing with on a regular basis. My vision hasn't changed from watching other lenders go out of business. We feel very comfortable about where we're at. Freedom has been in the wholesale market for a long time. We were in wholesale through the 2008 housing crash and we were one of the largest lenders that kept liquidity in the market during the first couple of months of COVID.
Believe me, I would prefer that all those lenders were able to stay in the market and the wholesale business would be able to grow in that way. But where we're at right now, this is good.
Believe me, I would prefer that all those lenders were able to stay in the market and the wholesale business would be able to grow in that way. But where we're at right now, this is good.
Do all the closures create opportunity for Freedom to bring on new brokers who might be on the lookout for lenders to partner with?
Brokers impacted by other wholesale lenders going out of business are out there. They're looking for lenders right now. I can tell you a number of stories where we've got new brokers signed up, because their companies shuttered and they were looking for new lenders to fill their government void. It's unfortunate, but it does create an opportunity for us, for sure.
What is your outlook on the wholesale space for the next year?
It's pretty positive. If you watch what's going on right now, there's so much contraction in the market that a lot of the originators are going to brokers right now. So, the wholesale channel in general is probably going to grow.
Now, that being said, it's going to be up to us to grow it and we're going to have to get some help in the market. I feel like that's coming, maybe in the second half of next year. We're gonna have an opportunity where we can grow this channel.
Now, that being said, it's going to be up to us to grow it and we're going to have to get some help in the market. I feel like that's coming, maybe in the second half of next year. We're gonna have an opportunity where we can grow this channel.
