Hello all: I'm not sure if this is happening in your neck of the woods but up here it's getting tougher to do loans if you're a mortgage broker. Frankly I'm glad I made the switch to a bank. It seems to me as if the days of the mortgage broker are gone for now. It's too bad. I used to be a mortgage broker and enjoyed looking for that perfect loan for my clients. I heard up until a year ago that mortgage brokers captured 70% of the market. Recently I heard that number was 50% and I wouldn't be surprised if it goes in half again.
It appears the lenders aren't really interested in being in the wholesale business any more. I know I had a file that I couldn't get done on the brokerage side and managed to get done on the banking side. It wasn't easy but we found an investor who would take it. My advice to all you mortgage brokers out there. Affiliate with a bank now. The guidelines are getting tougher every day and, if you wait, you won't be able to get any loans through. The playing field is diminishing and I don't see it correcting anytime soon. Perhaps when the economy picks up steam again we may see mortgage brokers enter into the fold again. But not before then.
As always, I'm curious what you're seeing in your area. Have an awesome day!
Paul McFadden
Paul,
Last summer (?) HSBC Mortgage here in Depew, NY shut down their "brokerage" arm and said they were only dealing directly with their own borrowers. So I don't think HSBC is on the wholesale side any more.
Tom Larsen
Tom: That is correct. Recently Citi pulled out and there have been rumors that Wells Fargo may exit too. We shall see.
Hey, Paul. I am in Tennessee and it seems that 95% of the business is all bank driven. I work at a title company here and I could see the trend happening. Luckily, we are very busy with ban and realtor business.
Paul, lending is definitely a different arena than it ever was previously.
Eric: That is so true. A loan officer needs to know what they're doing!
Chris: Thanks for the comments. I'm glad you're busy. Have a great year!
Brokers need to understand that their role in the mortgage business has slowly be diminished.
By July 2009, I predict an end to mortgage brokers because of wholesalers pulling out of TPO's business. Warehouse line will not accept that business.
http://www.mortgageteamnetwork.com/mortgage-net-branch.html
Thanks for your comments. To all those good people in the brokerage business I hope they wake up and see what's happening.
Paul, If there is a trend back to banking, is it perhaps a throw back to "He who has the gold makes the rules?"
I was also thinking this is motivation alone for loan originators to build a list. With a list, a mortgage professional is less affected by and better equipped to deal with revolving trends within the industry. kate
Kate: Thank you. Now more than ever we need to build a database we can communicate with on a regular basis! Take care.
A few months ago I would have said there is no way brokers would be extinct. At least I was really hoping so since my livelihood depends on it. However, with more and more banks shutting down their wholesale dept's and with the even more recent announcement from PMI that they will no longer offer MI to loans that originate from brokers, I am afraid my fears are coming true. I have a couple of my brokers already making plans to switch to correspondent.
Marie: I never thought it would happen either. But the banks are ruling right now. The mortgage broker may make a comeback when the market strengthens. Right now its pretty amazing so many shops have failed or merged with companies able to secure bank lines.