Fidelity Mortgage Services has access to wholesale prices posted by lenders, as opposed to the retail prices consumers would be obliged to pay if they shopped lenders. Lenders offer lower prices through brokers because brokers replace their costly sales and loan-processing force plus the infrastructure required to support it. Lenders who operate through both wholesale and retail distribution channels quote wholesale rates on fixed-rate mortgages from 25 percent to 50 percent lower than retail rates. Fidelity Mortgage Services, Inc. can shop lenders much more effectively than consumers. Fidelity is in the market every day, where consumers are in the market a few times during their lives.
Fidelity receives price information from lenders on a daily basis.
We know the features of the transaction that affect the price and underwriting requirements. We have relationships with multiple lenders, and are therefore, well positioned to find and shop among the lenders offering particular features. We also know the lenders who take one to ten days to underwrite a loan. In addition, price differences between lenders are smaller in the wholesale market than in the retail market. This is because lenders know that brokers are careful and knowledgeable shoppers while most consumers are not.