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    • Thu Jan 17th 06:27 AM | Rating: 0 0
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      Mortgage Brokers, RIP
      As an older (more mature?) wholesale Account Manager, I remember the days of a limited number of mortgage brokers. The mortgage brokers hold the same business position as any other industry. They are the tenacles that reach out to the general public and the underserved communities. The insurance "agent" shares the same condition. The insurance agent can be circumvented with online purchases or some alternative means of insurance protection (mailings).
      The mortgage broker is a necessity to the lending industry. They are more creative, persistant and forceful in securing loans for their clients. (some to a fault, I know) The banks could have owned the market, but they are inherently slow, conservative and not willing to reach out to the underserved. Don't you think Bank Of America would already owned all of the retail business if they knew how? Banks like the product. They don't like the business (see article above)
      Third party originations is a crucial part of any business. The mortgage lending industry has come under scrutiny because of recent abuses.
      You cannot stop a lender from developing a marketable product and enlisting unscrupulous brokers to sell it.
      How do you stop a Bank United from selling an inherently risky loan program at bargain prices and huge broker rebates, when the rest of the industry has disbanned the practice?
      How to you stop a Lehman Brothers, Merrill Lynch or Bear Sterns from launching new surrogate brokers to sell and promote some risky loan products?
      You can't. Government can't. Banks would love to be the only ones originating loans. Half the underserved and minorities would never own homes.
      I agree with the previous poster. Have a national disclosure process, where the borrower can compare prices, charges and rates without the current ludicrous disclosures. All fees, rebates, service release premiums and other broker compensation should be disclosed uniformally.
      Ever been in a grocery store buying a can of beans? Notice the disclosure of the pricing. Way too much information, but I can understand it. Why does a can of beans deserve better and more understandable disclosure than a mortgage loan?
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