Archive for the ‘commercial’ tag
Retail Mortgage Lending
What is the future for mortgage brokers?
With lenders closing their wholesale divisions, what do you think the future holds for all mortgage brokers out there? Do you think that wholesale will disappear and there will only be retail or stock lending? Let me know your thoughts or if you've heard any rumors!
The future is not good for mortgage brokers! National Association of Mortgage Brokers (NAMB) have to do some fast talking to convince everyone that they are able, honest and competent professionals. One of the actions that NAMB is working on is to adopt a code of ethics, which all licensed brokers would be expected to comply. I'm afraid this may be the classic example of "Too little too late." I'm sure there are many good brokers out there. But with the subprime boom, people were coming out of the woodwork to become mortgage brokers to make some quick money. Unfortunately (but unsurprisingly), many of these new agents had no clue what they were doing and just kept on make a lot of money. They did not care about their clients could actually make the payments or not or whether the newest loan product was right for them. Unfortunately, I think they Most major mortgage companies will dump their Wholesale operation (like Washington Mutual announced yesterday) because Retail is less risky (since you can not trust the integrity of a third party). With all the control mortgage institutions are, they're doing everything they can to reduce or eliminate the risk. During the loan origination entirely "in house" is one way to do it. Maybe NAMB will be able to save the day by restoring (To a certain extent) the reputation of mortgage brokers. But I'm not very optimistic. If the big mortgage companies pull up "welcome mat" so that brokers will have no choice but to go out of business. If a mortgage broker asked me for advice, I recommend that they try to get a job as a retail loan officer with a large mortgage company. I'm sure Wholesale Market will return to the last but I doubt it will be anytime soon. The good will survive, but this situation will certainly separate the "wheat from the chaff" (which is a good thing). Thanks!