Cutthroat wholesale market: Why competition creates more benefits for consumers

“I know some of my peers may not think so,” but according to the way to go, the worst thing that can happen for a wholesaler is consolidation among a few suppliers. According to him, the vitality and health of the population of borrowers is necessary for the whole market to be successful, and it will result in more options for consumers. Shoemaker also points out that expanding wholesale loan market share benefits everyone in the industry, even the big players.

“Think of it this way: the current market share is 22%,” Shoemaker said. “If wholesalers can be more integrated and better at educating consumers and growers about the benefits of wholesale, we’ll expand that 22% to 30%, 35%, 40%. Before the financial crisis, wholesale share was over 50%. You do that, everybody wins, even the largest lender in the business. Everyone wins by expanding wholesale market share, and many lenders pull out of the wholesale market. it’s not good because, again, that’s the choice. That’s the choice of the originator to make the best selling product for the consumer.”

The shoemaker intends to ensure Home Point is among the lenders to increase in this competitive market.

“I really don’t spend a lot of time thinking about what my competitors are doing because I don’t control them,” he said. “There’s nothing I can do to change what they’re going to do, so I focus on what I can do and the decisions I have to make to help the best of the Home Point to run it in. My goal is to help widen the road.”

Learn more by listening to Shoemaker’s full MPA Talk podcast interview here.

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