Why FinTech – Online Lenders Struggle with Purchase Deals

The mortgage industry is reeling. With mortgage rates doubling in 2022, much of the mortgage industry is struggling for survival now that refi-mania is over; and lenders that relied exclusively on refis are done!

Marginalized Agent Relationships

Fintech lenders have little or no “footprint” in the agent community. When did you last meet one of their reps at a caravan or board meeting? Never?

Why Lenders Prefer Refis to Purchases

Rocket Mortgage has begun using its massive advertising budgets to procure buyers and attempt to integrate them with its in-house real estate venture while “collecting” referral fees from those very same agents!

Specifically, the consumer watchdog agency is investigating whether Rocket Homes Real Estate violated the RESPA when it charged fees for referring Quicken’s mortgage clients to real estate agents that were unearned.

Miami Herald May 15-2023

Feds are investigating Quicken Loans.’
real estate affiliate for illegal kickbacks

The Rocket Homes℠ Verified Partner Agent Network

Agents are a wealth of info for all types of current market conditions and shouldn’t be shy about their lender opinions or that of other 3rd parties.

Any agents referring buyers to a lender with an in-house real estate agent staff are committing commission suicide.

Are Your Buyers Serious? Or Just Working You?

The moment a buyer gives you a prequal letter – Google that lender, as they may also have a real estate agent license OR an agent team in their office.

Why Pre-Approval Letters Are Worthless!

It’s been reported (legal disclaimer) that “some” FinTech MLOs are paid a bounty for switching buyers from their current agent to FinTech’s in-house agent. Hardly surprising?

Using Loan Officers to Screen Buyers & Close Deals

The FinTech business model relies on advertising budgets; personal relationships are easily replaced with more billion-dollar Super Bowl commercials.

So, if you like your cable TV customer service model, you will love the FinTech model even more.

At best, “unaffiliated agents” and their buyers with pending transactions are considered a “one-off” by the FinTech business model. Just another “file in the queue.”

2) The Homebuying / Lending Process is Complicated. And Inextricably Linked!

Many Buyers write most offers outside of regular business hours.

It’s always challenging to get anyone (including clients) during weekends, after hours, and on holidays, but to local lenders – agents are a source of referrals for an entire career – so if you have the MLO’s cell number -you’ll get a response more often than not!

As the offer is being submitted, it is in everybody’s best interest for the buyer’s MLO to call the “listing agent” to review the file and explain the strength of the buyer’s application. That’s just old school.

So, if you like your cable TV customer service model, you’ll love the FinTech model even more.

.Using Co-Signers – Gift $$ to Buy a Home

3) Inexperienced – Unlicenced CS Reps in “Call Centers.”

Buying a home is also buying a lifestyle. But lifestyles cost, and their final choices involve a buyer’s tradeoffs – that are calculated, re-calculated, and re-calculated again – up to the last moment – as buyers weigh amenities-locations and school districts.

Changing Jobs is Usually a Mortgage Killer

An experienced agent with MLO as a financial “point person” and a (familiar) live voice – on-call – can keep a transaction from blowing up at the very last minute when tempers are short, and deadlines are looming.

FinTech firms have substituted experienced, licensed (DRE and NMLS) MLOs with call centers (boiler rooms) outfitted with newbie salespeople, which are considered by most management as “interchangeable cogs in a wheel.” During refi-mania, this business model is very viable in a “purchase market” – not so much!

But, younger Millennials and Gen Z’ers with tech skills in the labor force have high career expectations, and boiler rooms are not high on the list.

4) Lending Apps Can’t Automate Everything

10 Reasons Why Loans Close Late,

OR

Applicants Get Denied

There are always surprises near COE, often too many for any FinTech apps to overcome. Until AI comes up with credible “mortgage-splaining” scenarios, MLOs’ jobs are quite secure in the future.

55 Reasons Tech Can’t / Won’t Replace Agents

The whiz kids of FinTech think they can take the human element out of the real estate transaction, but agents are not going anywhere – much to the surprise of the fintech world.

Insert Tagline Here

Why FinTech – Online Lenders Struggle with Purchase Deals

The mortgage industry is reeling. With mortgage rates doubling in 2022, much of the mortgage industry is struggling for survival now that refi-mania is over; and lenders that relied exclusively on refis are done!

Marginalized Agent Relationships

Fintech lenders have little or no “footprint” in the agent community. When did you last meet one of their reps at a caravan or board meeting? Never?

Rocket Mortgage has begun using its massive advertising budgets to procure buyers and attempt to integrate them with its in-house real estate venture while “collecting” referral fees from those very same agents!

Specifically, the consumer watchdog agency is investigating whether Rocket Homes Real Estate violated the RESPA when it charged fees for referring Quicken’s mortgage clients to real estate agents that were unearned.

Miami Herald May 15-2023

Agents are a wealth of info for all types of current market conditions and shouldn’t be shy about their lender opinions or that of other 3rd parties.

Any agents referring buyers to a lender with an in-house real estate agent staff are committing commission suicide.

The moment a buyer gives you a prequal letter – Google that lender, as they may also have a real estate agent license OR an agent team in their office.

It’s been reported (legal disclaimer) that “some” FinTech MLOs are paid a bounty for switching buyers from their current agent to FinTech’s in-house agent. Hardly surprising?

The FinTech business model relies on advertising budgets; personal relationships are easily replaced with more billion-dollar Super Bowl commercials.

So, if you like your cable TV customer service model, you will love the FinTech model even more.

At best, “unaffiliated agents” and their buyers with pending transactions are considered a “one-off” by the FinTech business model. Just another “file in the queue.”

2) The Homebuying / Lending Process is Complicated. And Inextricably Linked!

Many Buyers write most offers outside of regular business hours.

It’s always challenging to get anyone (including clients) during weekends, after hours, and on holidays, but to local lenders – agents are a source of referrals for an entire career – so if you have the MLO’s cell number -you’ll get a response more often than not!

As the offer is being submitted, it is in everybody’s best interest for the buyer’s MLO to call the “listing agent” to review the file and explain the strength of the buyer’s application. That’s just old school.

So, if you like your cable TV customer service model, you’ll love the FinTech model even more.

.Using Co-Signers – Gift $$ to Buy a Home

3) Inexperienced – Unlicenced CS Reps in “Call Centers.”

Buying a home is also buying a lifestyle. But lifestyles cost, and their final choices involve a buyer’s tradeoffs – that are calculated, re-calculated, and re-calculated again – up to the last moment – as buyers weigh amenities-locations and school districts.

An experienced agent with MLO as a financial “point person” and a (familiar) live voice – on-call – can keep a transaction from blowing up at the very last minute when tempers are short, and deadlines are looming.

But, younger Millennials and Gen Z’ers with tech skills in the labor force have high career expectations, and boiler rooms are not high on the list.

4) Lending Apps Can’t Automate Everything

OR

There are always surprises near COE, often too many for any FinTech apps to overcome. Until AI comes up with credible “mortgage-splaining” scenarios, MLOs’ jobs are quite secure in the future.

The whiz kids of FinTech think they can take the human element out of the real estate transaction, but agents are not going anywhere – much to the surprise of the fintech world.

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