A Fed-Up $30M Producer & The Death of Channels

Happy Friday! This week I got an earful from a $30M producer who's fed up w/ his large retail IMB: broken processes, deja vu 📝 arguments w/ management, & a tech stack that would require 5 monitors to navigate lol. What I find intriguing isn't that he's ready to peace out, it's that he legit doesn't care where he lands. He's weighing a mid-sized IMB & hanging his own shingle as a broker.

Turns out he's not alone. New data suggests the channel categories recruiters have been selling for ages aren’t especially relevant to LOs anymore. So let’s dive in!

Also in this edition: Trump plays chicken w/ a landmark bipartisan housing bill (deadline is today 🫦), the Michael Strauss fallout gets messier, Mike Kortas wants to give brokers a piece of servicing, & a mortgage job "opportunity" that smells 🥸 like a scam.

I have a source at a large retail IMB. He’s a $30M producer & he’s grown pretty frustrated. He’s weighing a move to a mid-sized IMB or opening his own broker shop. I asked him why things aren’t working out at his current IMB — maybe you can relate?

“Management is tight lipped, but it isn't good,” he told me. “Rates remain very elevated. We're still getting PEs on everything, but I'm just starting to get a little push back on that.”

He described process improvement as “non-existent.” He’s pointed broken processes out, had management agree, circled back two months later to find nothing has changed. 

“I will point out the previous conversation & they act like it never happened,” he said. “We have the same argument, they end up agreeing. It's like insane deja vu over & over & over w/ the dumbest stuff.”

The source described simple guidelines changes that have been in place for 3-6 months that underwriting & closing haven’t been able to adopt, for whatever reason.

“The problems, from my perspective, seem directly linked to middle & upper management. I'll have underwriters tell me on the phone that they get it, they agree, but their boss said no.”

Finally, the tech stack. “It is all over the place, doesn't integrate at all. It's almost impossible to navigate the various CRMs & secondary systems. I'd need 5 monitors to even attempt it.”

The fact that this LO, who only knows retail IMB & bank lending, is considering both broker & IMB setups is interesting to me. Ellen Duncan at mLoop, a recruiting platform, says these structural distinctions aren’t as relevant as they used to be.

“Looking at producers who've completed a full mLOOP profile: 82% checked three or more different company structures they're open to. Over half explicitly selected ‘open to all.’ Only two picked just one lane. And on lender size, 73% chose "open to any production scale" — they're not filtering by IMB-vs-bank, they're not filtering by 50-LO shop vs. 1,000-LO enterprise. They're staying open. That contradicts a decade of industry framing. ‘IMB producer,’ ‘broker LO,’ ‘bank LO’ — those categories are dissolving. What producers are actually optimizing for cuts across every structural type in our data. If your recruiting motion only pitches within your category, you're narrowing your funnel unnecessarily.”

In my estimation, a big part of this is b/c we see blurred lines across the channels now. Most large ‘broker shops’ are heavily in the non-del game (which some argue has retail stripes) & some even dismiss the nomenclature of ‘broker’ (it’s “wholesale” now 😜). Some of these firms run call centers but also have eat-what-you-kill LOs, tech teams, lead gen specialists, processors, etc. Meanwhile, many “retail” lenders are exploring hybrid structures and/or “hiring” real estate agents as LOs. I know of large retail IMBs that are interested in acquiring good-sized broker shops that would be “powered by” the large IMB.

IMO, the wholesale channel really has leveled up in recent years. Broker shops are able to scale up like they never could pre-Covid & legal/regulatory quirks give them certain advantages.

For years, recruiters sold LOs on channels: you can scale your biz in retail, come to wholesale (brokers are better!), come to banking, etc. IMO, today producers seem more interested in who has the best pricing, who gets their loans closed, fixes broken processes The logo on the door just doesn’t matter like it used to.

President Trump won’t sign the “21st Century ROAD to Housing” bill as a protest against the lack of action on his sweeping voter-ID proposal. It’s unclear if Trump will veto the bi-partisan bill or just let it lapse. Today is the deadline. If he does nothing, it would automatically become law. If he does veto it, the bill would get kicked back to Congress. 

There are roughly 50 initiatives in the bill. Among them, it provides federal grants to remove restrictive zoning laws & land use barriers that delay construction. It also bans large-scale institutional investors from mass purchasing single-family homes. There are carveouts for BTR, however. (There’s a misconception that massive corporations are buying up all the housing stock in America. It just isn’t true. Mom & pop investors dwarf the Invitation Homes’ of the world.)

Upgrade your subscription to unlock the rest of today's Scoop: another twist in the Michael Beth Strauss saga, Mike Kortas' servicing play, Basel III lobbying, POS moves, a questionable recruiting pitch that smells like a scam & more!