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Are brokers an endangered species?

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Mortgage Professional America | 09 Oct 2013, 06:00 AM Agree 0
Although brokers are still going strong in other countries, their slice of the market is getting smaller and smaller in the United States
  • Tim K | | 09 Oct 2013, 09:27 AM Agree 0
    It is clear that the regulators in this country do not clearly understand how the business of brokering mortgages actually works. There is essentially no difference between YSP, SRP and Gain on sale. Regulating businesses like there is shows their ignorance.
  • Charles Stidham | | 09 Oct 2013, 09:34 AM Agree 0
    I would like to take umbrage with this article because in Texas and more specifically San Antonio (my market) being a broker for the past 18 years is a sheer blessing. Competing against USAA, Wells, B of A and banks is like taking candy from a baby. We offer lower rates and fees while at the same time offering superior customer service. By the time the third supervisor at a big bank allows a customer service agent to send out a fees worksheet or GFE I have already made the mortgage application, devliered the pre-approval letter to the Realtor and sent the mortgage to an underwriter, fully compliant. I vociferously look forward to the CFPB's 3% rule because the more stringent they make the rules the easier it is for professionals like me (replete with a Master's degree) to garner even more market share.
  • Paulsmoney | | 09 Oct 2013, 10:05 AM Agree 0
    Well I hope all the happy mortgage brokers (with or without MBAs) know how form a PAC to protect the mortgage industry as it is (at best) from continuing bank-favored legislation.

    Mr. Happy Wallet in Texas has to realize that not all regulatory industries understand the value of mortgage brokers. They do understand political contributions and the relative cold shoulder the Realtors have shown the mortgage brokering aspect of the real estate business.

    Glad you got your slice of the mortgage pie out there, yee-haw. Just watch that don't get much smaller cowboy.
  • steven s | | 09 Oct 2013, 10:07 AM Agree 0
    ya kinda like when u cant get licensed (credit in the toilet)and did all subprime they ran to the banks. The broker right now is actually the cream of the crop. Also if you are an order taker you need the bank branch. I find MPA is ver anti broker and it is quite offensive.
  • Steve H | | 09 Oct 2013, 10:08 AM Agree 0
    I agree with you Charles, right on the money!
  • CoreyD | | 09 Oct 2013, 10:27 AM Agree 0
    I think Frommeyer is part of the problem with his last quote about everyone needing to be licensed. This is just crap. All of the "over" regulation has caused nothing but problems, particularly for the consumer who is trying to get a mortgage. Spoken like a true bureaucrat Frommeyer!!
  • Eric M | | 09 Oct 2013, 11:02 AM Agree 0
    What I would like to see is a level playing field between what bank, corresponents and brokers. All working off the same platform period! Same licensing, same comp plan, same disclosure compients! How hard is that?
  • Traci | | 09 Oct 2013, 11:22 AM Agree 0
    It continues to amaze me that the CFPB and current rule makers want transparency, fairness, equal treatment of and for consumers. Yet those very same regulators completely ignore those missions when issues regulations. It SHOULD NOT matter one bit if you are an independent broker or work for a bank or credit union. If you are a MORTGAGE LOAN ORIGINATOR, than you must be "licensed" other option!! Until then, they is going to remain negative impact to small businesses. You can't have two different sets of rules for the same service!! Talk about calling the kettle black!!!!!
  • Michael | | 09 Oct 2013, 02:47 PM Agree 0
    Those above who are complaining about licensing need to wake up and smell the reality. FRAUD was rampant before the melt-down and licensing has helped weed out the majority of the bad guys. Unfortunately many of them just moved over to the banks and continue as if nothing happened. I personally know dozens of people who could NOT pass the NMLS test and are now working for a bank. The bank mortgage originators should be required to take the same tests as brokers.

    Fact 2... NMLS licensing has not been the nail in the brokers coffin. Far from it.

    Fact 3... The banks and the mortgage bankers all had Barney Frank and Chris Dodd in their back pockets! They owned those two crooks and were instrumental in the making of all the Dodd-Frank regulations that have made it impossible for mortgage brokers to pay their mortgage officers on the same lever that the banks and direct lenders do.

    Fact4... mortgage brokers must disclose all income charged and YSP to the borrower, while the banks and direct lenders do not! This is dishonest and definitely not an equal playing field.

    I just competed against a direct lender on a FHA mortgage at 4.25%, the direct lender did not have to disclose the 5 points YSP and I did. This made me look like I was earning more than the direct lender, when in actuality he was earning a lot more but did not have to disclose it!

    Until we get equal compensation regulations we brokers will continue to die a slow death. Either no one discloses or we all do.

    And why should we have to disclose. Does the gas station tell you their gross income? Does the car dealer tell you his gross income? Does the grocery store tell you their gross income? No, No, No, No, and NO!

    And we should not have to either.
  • SB | | 09 Oct 2013, 05:41 PM Agree 0
    The world of equality is far from existence. Yet, the only reason banks have excelled is because of their refinance of borrowers underwater...wait until the rates go will see us excel. Numbers are not as they seem for the banks and they will realize brokers have been concentrating on purchases while banks have been concentrating on refinances. We will be at 70% again as broker originations patient my friends!
  • Michael | | 09 Oct 2013, 06:32 PM Agree 0
    SB.... I disagree. Brokers will never regain their stature until EQUAL regulations are passed. Just for one, the banks have been working very hard placing their mortgage officers into real estate offices and they can legally pay the Broker for the privilege. The bank must pay a guaranteed fee every month even if they do not receive one single mortgage. Brokers don't have the deep pockets to compete with the banks in this arena. Brokers are being locked out of real estate offices every day because the banks have a office exclusive, and or the real estate broker has his own mortgage business. Every major bank is doing this! Some of my mortgage officers quite and went to work for a bank that placed them in the real estate office. Even though I paid them twice as much as the bank is paying them, 200% of nothing is nothing. My guys couldn't compete with the power of the banks.

    Unless the mortgage brokers and the real estate agents band together and fight the regulators for fair and honest regulations, we will lose. And if you think the real estate agents will ever join with us in this battle, well, have have a bridge to sell you.
  • Tim | | 10 Oct 2013, 09:12 AM Agree 0
    Say WHAT. I got this from the GA at NAIHP, who Im told has 10,000 members,

    As you can see about 50% of all the mortgages originated in 2012 were from non banks. Read the Data. Brokers are growing. 86% of the 800B in mortgages were brokered. That's about 36% of the entire industry.

    75% are companies with 1-5 employees.
  • Kirk | | 10 Oct 2013, 09:18 AM Agree 0
    As a true broker, we don't need the bank originators to be regulated to "level" a playing field. The tide will turn towards some brokers in a purchase market, I have both a real estate brokers license and a mortgage broker's license; To be clear - you will not want to try to "compete" with me in western Washington. The broker's that are left surviving are smart. We always find a place and a way to win the business, because we are nimble and quick- I can give away what you can't even offer - real estate commissions. Complete with that...
  • Eric M | | 10 Oct 2013, 10:22 AM Agree 0
    You must have been reading all of my posts the last couple of years! I have been saying all that you posted here to anyone and everyone! Why do we have to disclose what we are making??? Why are we capped at what we can make???? Is there any other financial profession that has these restrictions????
  • Michael | | 10 Oct 2013, 10:48 AM Agree 0
    Tim.... There are statistics and there are damn statistics. 68% of the business you talk about were refinances. Primarily HARP mortgages. As interest rates move up and we get into a purchase market broker business will drop dramatically.

    Kirk... you make one of my points. Real estate brokers who also have their own mortgage division have the ability to either undercut their mortgage origination fee or real estate commissions. Something that stand alone mortgage brokers can't do. You are not as you say a "true mortgage broker".

    As I stated earlier, in those state where the law allows a real estate broker to also be a mortgage broker, the true mortgage broker only companies are locked out of their offices. In those offices where a bank or mortgage banker is paying the real estate broker a fee to have a mortgage officer in the office the mortgage broker is again locked out.

  • Michael | | 10 Oct 2013, 10:53 AM Agree 0
    Eric M... the real questions is ... is there any other industry with these restrictions?! The second real question is ... why in the hell are we sitting down and accepting these restrictions?!

    Evil (and what is happening to this country is evil) persists, only when and where good men do nothing! What would happen if everyone in our industry told the CFPB and congress to go to hell, we aren't going to settle for this?
  • Kirk | | 10 Oct 2013, 10:59 AM Agree 0
    @Tim - I have a two person real estate brokerage and a two person mortgage brokerage - both home bases. There is NO BANK that wants their customer calling me. They can have me disclose what I earn or do clock hours, I don't care.- Like I said before the smart ones will find the places they can win. Banks are outlawed from owning real estate brokerage companies. Brokers can take the market back whenever they choose too.
  • jak | | 12 Oct 2013, 05:07 PM Agree 0
    we must stop making comments and mentally stimulating each other, and take some actual actions designed to bring the non level playing field to the media and public attention, and figuring out ways to affect political process. otherwise its an ineffective exercise in yammering to the wind.
  • KAW | | 16 Dec 2014, 10:33 AM Agree 0
    Banks have excelled due to better lobbying. Join Namb for a louder voice.
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