Some say that the mortgage crisis, among other things, will lead to the end of mortgage brokers as we know them.
Instead, they suggest that you'll have to go directly to a lender to get a loan. I don't believe it's true, but I'm not psychic so who knows?
Recently Chase and Citi cut off mortgage brokers. To get a loan from Chase or Citi, you have to apply directly through the bank.
This doesn't quite spell disaster for brokers, as they still have other options. However, if it becomes a trend then your mortgage broker may become less and less competitive. My hope is that brokers will continue to have a variety of sources, but it may just be that the system doesn't work anymore.
What's your experience with mortgages? Do you use a broker, and why? Tell us about it in the comments.
Further reading:
As a seasoned wholesale prime bank rep., I can see how hard it has become for the mortgage broker. It is unfortunate because the broker model is ideal for borrowers. Fortunately many that got in to this business for the wrong reasons are now gone…good riddance! Back to the fry fryers! The foundation of the broker is/was to pursue the best loan scenario for their clients loan(s). In the recent past years, the industry has turned into brokers shopping the best loan for themselves…for highest rebates. With new regulations and bank policy, only the strongest quality brokers will survive and still be able to offer great services to borrowers. States need to get tougher still, as it is too easy to get licensed. Mandatory college education should be a prerequisite to get a brokers license.
I wish those criteria you mentioned as a prerequisite were in place before my wife got scammed. I live in Alpine NJ, and experience criminal lending practices first hand. I was referred by a Realtor to a Loan Officer. She directed me to his advertisement online and I called him. I should have known by his inability to spell that something seemed wrong but I called the number anyway. It was listed as HSBC in Hoboken NJ, I called the number listed in the ad which ended up being a personal cell phone. After telling him my current credit score he stated that HSBC would most likely not approve me, however he stated he also worked for a brokerage that he could get me approved with. I thought it seemed kind of strange that he worked for two mortgage companies at the same time so I called the Banking Commission and came to find out that, that is an illegal practice. I directed them to his ad and they said they would have an investigator handle things, and for me to not provide him any additional information about myself. I have since subscribed to Life Lock to protect my identity since I am concerned that this individual had my social security number now and based on the face he was engaging in illegal activities I might be at risk. Below is the ad he had posted, if you or anyone you know is or has worked with this person, please contact the BBB, Attorney Generals office and the Banking Commission. People like this need to be stopped. HSBC has stated that the ad below was posted without consent.
Name [Removed. Report violations to local and industry regulators]
My Story
[...]I have been in the Mortgage Business since October of 2003. I bartended for 9 years before I became a Loan Officer. At that time I never heard the words Origination or Discount point. I knew nothing about mortgages. I did end up seeing those words when I bought my first house. I could not believe how much of my hard earned money I was paying for the American Dream. The loan officer at the time said it was standard fees that everyone paid. A year later I got into the Mortgage Business and realized that this man had really taken advantage of basically someone who knew little or nothing about mortgages. I really trusted this this loan officer and almost could said my friend durring my loan process. He knew that this was my life savings and he still did not care.
When I became a loan officer I promised myself that I would not take advantage of anyone because I wanted people to always Trust me as loan officer and maybe even a friend.
My experience various from 1st Time Time Buyers, savoy borrowers and even high end borrowers. Working for HSBC Mortgage Corp. really gives me the tools to work with all borrowers. In my oponion we have the lowest the lowest fees, great customer service, and competitive Interest rates.
don’t ever use a broker! i did, payed 2 points, and the broker laughed at me. Really, why should a high school drop out make 2,000 or more for a few hours work? i know a broker who sets up one loan a month, tries to make 4,000 or more, then takes the rest of the month off. what a joke!!
Dave,
1.) You used a broker because you probably could not get approved at a bank.
2.) Banks charged brokers fees for an interest rate based off the risk assessment of the applicant. (Hense lower credit score)
3.) If you do have great credit, then it’s your own fault that you paid 2 points.
I am sick of hearing a bunch of cry babies talk about how they had to pay points. SInce you are “such a low risk” walk into a bank, get a low cost loan, and buy a box of kleenex
Sincerely,
Seriously!
As a seasoned mortgage broker for 7 years now I believe there will be very few brokers left. The process has become much too tedious and the payoffs are now very very low. Not good for consumers to eliminate competition.
I have worked with [...] on a few transactions and he has always done the right thing. Fees and rates were always accurate. He has done transactions for me and most of my family. Todd, you are a Fraud!!! You are most likley a jealous loan originator that has lost deals to [...].
I’ve worked with [...] on more than one occasion. He has done loans for myself, sister, parents and several of my friends. I dont understand the previous comments made that he has been practicing with two mortgage companies. Yes, this is obviously illegal and would not be tolerated by HSBC. But he still works for HSBC today, so how is that possible? Mortgage brokers are a dime a dozen but lenders who help you from A to Z to attain a loan and are there for you the whole step of the way are hard to find. Shame on anyone trying to knock someone’s career for being successful!
I work in a bank as a loan processor. Most of us are not “idiots and losers”. Some of the Loan Officers are shaddy, but most of us are good people. I also know that any loan that goes into default will be given close scrutiny as to how the customers qualified for that loan. The origional paperwork will be reviewed to make sure there was not fraud involved. If it can be determined that there was fraud or forgery involved those parties will be prosecuted. Look up the sentencing guidelines for bank fraud. They are on average 10 years per offense. One bad loan could have multiple offenses. Banks and the Federal Government are pissed and are looking to nail anyone responsible to the wall. Hold onto you’re chairs laddies and gents this has not even warmed up yet.
I’m with R&P, you guys who are putting people down for trying to do their job is not write. I bet you guys never made at least $75k or never will make $75k. I’m guna make that some day if I work hard. Not everyone was born smart. They can not help it but its worse to be smart and not make good money. The guy from HSBC is trying he is being creative trying to find ways to make good money. If he works at Burger King on the side so what? I give him more credit for “frying something” on the side so he can pay his bills, not like you people.