Earlier quoted context omitted.
How this downsizing looks from a client's point of view: I have almost finished a 4 months long process of buying a summer house (including one failed deal), and my first financial agent - a very bright and fast girl - was fired right in the middle of my first transaction... and nobody told me a word about it - neither the manager, not the new agent, so I was sitting in the dark for a week or so. The agent that I got…
I tried using Rocket last year for a mortgage and had a similar experience, aside from starting with a helpful employee. The folks I tried to work with were unresponsive and extremely unhelpful. One thing that blew my mind was how terrible most mortgage companies I contacted are. I lost count of how many places I contacted that were slow and unhelpful about everything, and it kind of blew my mind. I was reaching out…
"There must be some pretty large moats in this industry because most shops are clearly not competing on competence or customer service."
There is. It is a capital intensive business that has licensing requirements for every state that you do business in. There are mortgage companies that will loan you the money and then turn around and sell that loan to an investor who would then service the loan. There are also mortgage companies that will loan you the money and also service the loan for its entire lifetime. In the case of the former, you can make your money back relatively quickly as you should be trying to sell the loan to an investor around the time of closing but there is risk in doing so. If you haven't done your due diligence about the borrower and something negative about the borrower comes to light (such as borrower lying about income) then the company that is buying the loan can pull out and now you are on the hook for a large loan that you issued to somebody who may not be qualified. With the latter, your income is going to be slow at first since you would only be making money from monthly payments.