Why More Loan Officers Are Choosing the Wholesale Model (And How AZM Lending Borrowers Benefit)
By Josh Yoder
If you have been watching mortgage rates hover near 7.43% on a top-tier 30-year fixed loan, as of October 19, 2026, you already know this is not an easy market for lenders. Volumes are down, margins are thin, and the industry is restructuring around both facts. But the most interesting signal in that restructuring is not a number on a rate sheet. It is the people. Loan officers themselves are leaving big retail operations and moving to the wholesale, broker side of the business.
At AZM Lending, this movement is not a trend we are chasing. It is the model we have operated in all along, and 2026 data shows the rest of the industry is moving toward it.
The numbers behind the shift
According to RETR data reported through September 9, 2026, independent mortgage banks lost roughly 100 net loan officers during the first nine months of the year, representing approximately $1.8 billion in production. Over the same period, the non-delegated, broker, and wholesale channels gained 327 net loan officers and nearly $7 billion in production.
That is not a rounding error. It is a structural migration of talent and volume, and it happened in nine months.
Industry commentary attributes part of it to technology: modern platforms make it easier for loan officers to move their production into operating models with lower costs and more efficient fulfillment, which is exactly what wholesale operations are built on. A loan officer who used to need a bank’s big back office can now run the same volume through a broker’s leaner infrastructure without giving up products or pricing.
What is happening inside the big banks
The pressure is visible in public earnings. In the third quarter of 2026, JPMorgan and Wells Fargo both reported mortgage origination volumes declining roughly 10 percent quarter over quarter, broadly in line with industry expectations. JPMorgan’s gain-on-sale margin fell 56 basis points to 0.29 percent, and its retail mix dropped from 61 percent to 54 percent as retail volume fell 17.9 percent while correspondent volume rose 10.6 percent.
Two honest caveats. First, one bank’s margin decline is not automatically an industry-wide trend: pipeline hedging losses and one-time items make the picture murkier than a single quarter suggests. Second, the Mortgage Bankers Association currently forecasts 2027 production to come in about 5 percent below 2026 and below $2 trillion, which keeps pressure on every lender to cut the cost of originating each loan. The direction is consistent: high-overhead retail operations are being squeezed hardest, and the loan officers who see that happening first are the ones moving.
How the two channels actually differ
Most borrowers never see the difference between a retail lender and a broker, because both will happily take your application. The difference shows up in what you are offered.
At a retail bank or a direct-to-consumer lender, the loan officer generally sells one institution’s own rate sheet and product shelf. One lender’s pricing. One underwriting rulebook. If your file does not fit that rulebook cleanly, your options are limited to whatever exceptions that single lender allows.
In the wholesale and broker channel, the loan officer prices the same file across multiple wholesale lenders competing for it. Different lenders apply different pricing adjustments, different overlays, and different niche programs. A file that one lender prices poorly or declines outright can land somewhere else on better terms.
This matters most for borrowers who are not a textbook case: self-employed income, a recent credit event, an investment property, a large down payment with reserves, or a property type outside the mainstream. A retail lender has to fit you into one box. A broker can place you in the box that fits.
There is also research on the outcome: a 2024 analysis of 2023 originations found that consumers using an independent mortgage broker saved an average of $10,662 over the life of their loan compared with nonbank retail lenders. For the mechanics of how a broker transaction works from the borrower’s side, see our guide to using a mortgage broker.
A note on loan officer compensation
Ask a room of originators how they get paid and you will hear one answer: close loans, get paid. Ask how the math actually works and the room goes quiet. Compensation agreements in this industry carry fine print around team splits, recruiting overrides, expense accounts, and Regulation Z compliance, and those structures differ dramatically between a corporate retail shelf and an independent brokerage.
The practical effect for borrowers is this: in the wholesale model, a loan officer’s economics are built around funded, well-structured loans rather than on corporate volume targets. That is a meaningful part of why experienced loan officers are migrating into the wholesale channel, and why the ones who move tend to stay.
What this means at AZM
AZM Lending operates as an independent broker serving borrowers across Arizona, Colorado, Michigan, and Texas. When you bring us a loan scenario, we are not locked to a single rate sheet. The process works in three steps:
- Scenario intake. You give us the full picture: income structure, credit profile, property type, timeline, and goals. The details that make your file “unusual” are exactly what we build the strategy around.
- Wholesale panel pricing. We price the scenario across our wholesale lender partners. Each partner sees the same file, applies its own guidelines and pricing adjustments, and competes for the loan.
- Side-by-side comparison. You see the options with real numbers: rate, fees, and total cost, not just one lender’s headline rate.
If you want to see this in practice, ask us to price your scenario through a single retail option and across our wholesale panel. The difference in rate and fees is usually visible on the first set of quotes.
Questions borrowers ask about this shift
Does this mean retail lenders are going away? No. Big banks will keep originating mortgages, and for some borrowers a bank’s own portfolio product is the right fit. But the trend is clear: talent and volume are flowing toward the wholesale channel, and that channel exists to shop your loan rather than sell you one product.
Is a broker more expensive? The wholesale model is built on lower fulfillment costs, not higher ones, and brokers are compensated in ways disclosed on your Loan Estimate just like any other lender. The compensation structure does not change your access to comparison shopping; it is what makes the comparison shopping possible.
Do I need a perfect file to benefit? The opposite. The borrowers who benefit most from a broker’s panel of lenders are the ones whose files do not fit a single lender’s rulebook cleanly.
Will this change my rate? Rates are set by the bond market, and no channel controls that. What the channel controls is which lender’s pricing adjustments apply to your file.
The takeaway
The mortgage industry is reorganizing around a lower cost per loan, and loan officers are voting with their production volume. Borrowers do not need to care about any of that directly, but they benefit from it anyway: the channel gaining talent is the channel built to shop your loan, compare real options side by side, and place your file with the lender that treats it best.
If you are buying or refinancing in Arizona, Colorado, Michigan, or Texas, talk to an AZM loan officer and see what a wholesale-priced scenario looks like for your file.
Sources
- Pipeline Press, October 16, 2026: LO Retention Examined (RETR loan officer migration data, JPMorgan and Wells Fargo Q3 earnings, MBA 2027 forecast)
- Mortgage News Daily, “Mortgage Rates Start Week Higher,” October 19, 2026 (top-tier 30-year fixed rate context)
