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Assuredly Mortgage Brokers abused the system. The “Greed is Good” advocates clearly contributed to America’s financial crisis. The Lenders participated equally dumping their mortgages onto Freddie Mac, etc. And so, now, the question is: Are the Lenders doing what’s right to amend their wrongs or are the Lenders simply distancing themselves from their past indiscretions? Richard Michael Abraham
Citibank has been irrelevant to Wholesale for several years. Mortgage brokers are alive and well. Last year was my best year, and this year is already off to a flying start. I have developed a long list of referral sources; the majority are customers who received better rates, lower costs, and better service than they ever did at the mega banks. The others include realtors, attorneys, financial advsiors and other professionals that trust my ability to handle their clients’ requests.
As far as the subprime crisis went….I have literally hundreds of emails from Citi, Chase, and other mega banks begging me to send them subprime loans. It’s not my fault that they took subprime loans and turned around and misrepresented them as A+ loans to unsuspecting investors in the secondary market.
I have been involved in the mortgage industry for over 25 years and yes there were bad mortgage brokers out there 3+ years ago that definitely needed to be “weeded out” of the industry. As the so called “liar loans” went away (beginning in March ’07) and new licensing and regulations piled on top of the industry they all left. Well…that was good but the pendulum has swung way too far. Now good honest people many of whom have been in business over 20 years are being driven out of business. It has become a political “feather in the cap” yielding votes at the polls for politicians to stand on stage and make accusations at today’s mortgage brokers. Many of whom never did a sub-prime loan. Isn’t it interesting to any of you that as small business people close their doors the big banks just increase market share and profit from the industry? These are the same banks who created the products, underwriting guidelines, closing procedures, commissions and quality control procedures which caused the economic crisis. The people ultimately responsible for the economic damage are growing while small business people close their doors. What about the congressional influence on the industry to make home ownership available to a greater percentage of society? The whipping boy continues to be the little guy. As far as the consumer is concerned he/she will pay for the shrinking competition. As the competitors go away the big banks will not be pushed at all to compete with quality price, product and service. It is already happening. This is simple economics.
Mortgage brokers took commissions, yet assumed no responsibility for incorrect or false applications.
All banks should avoid them. Good, ethical brokers can get jobs as loan officers/originators.
There is no reason that costs should go up.
Brokers received hefty commissions for originated loans. Inside originators will get commissions, but in a lesser amount I would expect. Plus banks should save money on lower losses from reduced fraud.
Costs to borrowers should remain about the same.