If you've been paying attention to the mortgage industry news, you've likely heard about BRAWL by now. BRAWL (Brokers Rallying Against Whole-tail Lending) is a new initiative started by a group of independent mortgage brokers dedicated to ending the practice of whole-tailing. The word “whole-tail” was made up to describe those mortgage lenders that utilize their wholesale business to grow their retail channel.
BRAWL has been gaining momentum since earlier this fall, when they penned an open letter and created the petition to stop whole-tail lending. The letter voiced frustrations felt by the broker community over the years. Here is an excerpt from the letter:
"Let’s get to the truth about lending. Whole-tailers are stealing our customers, but we’re the ones handing them the keys to the front door. Let’s pledge to partner only with true wholesale lenders until the whole-tailers put an end to their ways. Let’s work together in the best interest of our borrowers and ourselves. Let’s keep wholesale true."
BRAWL has also created a list revealing the "good wholesale lenders" and "notorious whole-tail lenders." Plaza is proud to be on their "good wholesale lenders" list. We do not have a retail lending channel, and we will not compete with our customer for their own customers. We have always been 100% committed to supporting mortgage brokers.
To be labeled as a true wholesale lender versus a whole-tail lender, BRAWL evaluates companies using a five-part checklist. If a wholesale lender does no more than 20% of its business in retail, and checks the following boxes, they’re viewed as "good guys":
- Route all customers originated by brokers through the wholesale channel back to the originating broker, with no time limit
- No solicitation by the retail division, under any circumstances, of customers originated by brokers through the wholesale channel
- Communicate to broker when a previous customer orders or requests a payoff
- Non-compete policy for lender retail division on any customer registered through a wholesale channel that contacts the lender directly
- No solicitation of any broker employees for any employment opportunities with the lender
In BRAWL's first webinar with the broker community in November, over 2,000 industry professionals tuned in. James Cutri, Executive VP, National Production & Co-Founder of Plaza Home Mortgage, was one of four featured industry leaders that spoke in the webinar. James discussed how he started in the industry as a loan officer. His unique start is part of why the BRAWL movement resonates so strongly with Plaza. He begged this question to the broker audience: "When you have so many choices, why would you partner with someone who isn't partnering with you?"
We are excited to see how BRAWL impacts our industry. The more awareness and attention that is brought to this issue, the more likely it is that whole-tailers will change their business practices. There are several ways that you can get involved with BRAWL today:
Click here to visit BRAWL's website.
Click here to sign the petition in support of true wholesale lenders.
Click here to join BRAWL's Facebook group.