Mutual profitability – a business model that equally supports networks and lenders – is one that is still close to the heart of one industry leader in the mortgage space.
“Aside from having a consistent relationship and understanding the pains on both sides of the industry, we’re very fortunate to have a number of lenders that are basically the backbone of our particular business,” says Colin Dreyer
, president and CEO of Verico
Financial Group. “Without lenders, without products to sell, where would the industry be? As originators, we are very reliant on our lenders, and the lenders are very good in the compensation levels that they provide to the broker community.”
According to Dreyer, it’s up to the networks – and the brokers themselves – to ensure the quality of deals being sent to lenders. But the lenders share some responsibility as well.
“On the lenders’ side, we need to look at it as a partnership for long-term strategy,” he says. “The trailer fees enhance the partnership relationship and create ongoing revenues and consistency for both sides. Some lenders are using the trailer fee model to maintain their level of business.
“Churn is a big problem for lenders,” he continues. “When they pay for a particular customer, they would like to see that customer stay in their database. So they’re recognizing that to do that, perhaps the partnership level should be to pay at renewal.”