For mortgage brokers who work with one or more of those large companies, it could set them up for additional benefits, streamlined loan processes, and support throughout the mortgage. For smaller lenders and brokerages, it might feel like the walls around them are getting larger.
“I think it continues what we’ve been seeing from a competitive standpoint,” Gehrke said. “Lender-servicers are flexing their muscles and getting bigger and bigger pieces of the pie. It shines a light on the competitive environment that smaller folks, independent lenders, and mortgage brokers are competing against bigger and bigger players that are building an advantage at scale.
“I think that really requires an intense focus on execution from them, and being the best that they can be at what they do. They need to really leverage that local advantage, because that’s what the big players don’t have. That’s what they don’t bring to the table. It really highlights that’s where the competition is going to be fought as we go forward.”
Trigger lead ban effect
Another factor in industry consolidation is the ban on trigger leads, which is set to go into effect in early March. With companies scooping up servicers, Gehrke said this could allow these companies to expand the list of customers they are legally allowed to reach out to.
“If you think about the other shoe that’s about to drop next month, you have the new law around trigger leads coming into play,” Gehrke said. “The servicers are carved out of that, and prior lenders are carved out. They’re still going to see those trigger leads. But if you’re not, and you built a strategy around pursuing those types of leads, you’re going to be out in the cold, and it makes it a little bit tougher.”
