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I have a question for the mortgage brokers out there. With Bank of America announcing that it is cutting wholesale operations and many other lenders slowly starting to shift operations to retail, do you think that the wholesale business is going to shut down completely over the next couple of years? I certainly hope not, as I feel that retail rates, fees and guidelines are significantly worse than wholesale, but I have to wonder if we're not seeing the beginning of the end for brokers.
I hardly know any brokers that deal with BofA wholesale...their rates were reallly bad.
Mortgage brokers fund about 60% of the mortgages in the US...we'll see what happens.....hopefully we're the breed that this market needs
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Originally Posted by DavidS827
I have a question for the mortgage brokers out there. With Bank of America announcing that it is cutting wholesale operations and many other lenders slowly starting to shift operations to retail, do you think that the wholesale business is going to shut down completely over the next couple of years? I certainly hope not, as I feel that retail rates, fees and guidelines are significantly worse than wholesale, but I have to wonder if we're not seeing the beginning of the end for brokers.
If the Dems get their way with their over the top new mortgage lending bills...it could lead to the demise of the 'mortgage broker' in the near future.
I know they have a huge presense here in Northern VA. So there are a ton of brokers around here looking for other lenders now. I just have to wonder if the "rumors" I hear about other lenders doing the same thing wont come true in the not so distant future.
Mortgage brokers will not disappear. From what I've seen 90% of the time the lenders that have the best rates are the wholesale lenders that sell almost exclusively through brokers. The public has probably never even heard of them.
These lenders will always be around IMO and can offer the rates they do because they don't have the cost of having retail locations like all the banks do.
If mortgage brokers go, I'd hate to see what would happen to mortgage rates and charges.
What exactly does a mortgage broker do - find the best loan?
They match customers needs with loan products. Each broker probably works with a number of different lenders who have a portfolio of products. Familiarity with those products allow a broker to find the right loan for a particular customer's scenario.
The title of this thread reads "Are Mortgage Brokers a Dying Bread?" I think you meant to ask, "Are mortgage brokers a dying breed."
But really...even though a company says it has 200 different loan products...aren't 90% or more of mortgages funded with either fixed/30 or whatever desired term or arms of some length (which should be banned in my opinion ONLY)?
I've bought and sold many properties. I have basically utilized two types of loans: Fixed / 30 year or Interest Only - Fixed - 30 year which means Interest Only option for 10 years - rate fixed for 30...Oh and ONCE I used an ARM on a house that I *knew* I was going to sell in 7 years. Well guess what five years have gone by and maybe I won't so that ARM has to go somewhere.
Boa cutting their wholesale operation has zero effect on my business. I choose Wholesale only lenders and that lets me compete effectively against the "loan officers" in the local bank.
As for the death of mortgage brokers, its greatly exagerated. Banks created the mortgage broker because of their restrictive guidelines. We went out and found other investors who would fund deals for people who didnt have 25% to put down. Our greatest strength is the ability to go outside of "retail" channels to find money that meets our clients needs.
Yes, there are mortgage brokers getting out of the business. In the last 5 yrs we had many people flock here who were not really comitted to their trade and now are looking for greener pastures. Thats fine with me, I'll still be here to fund all the deals that are still out there.
In today's day and age, I would think more and more people are looking at "do it yourself'ers" and "buy over the internet" scenarios. However, in my mind, there will always be the people who want the "personal touch" and the comfort of having a professional -- a live person, who is your advocate, sitting on your side of the table, etc. -- who is there for you.
So, my answer is no, they are not a dying breed. Perhaps their business and business model is changing, and perhaps there will be a need to reinvent to some extent, but I do not think they are a dying breed. I do think there will be a shakeout and a cleansing process to the industry however. Good thread.
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