Forum firestorm over banker's comments that brokers are barely regulated

by Ryan Smith14 Aug 2014
A couple of days ago, we reported on some comments made by the president and CEO of the Florida Bankers Association, and reader response was, shall we say, impassioned.

On the Fox News show Sunday Morning Futures, Florida Bankers Association President and CEO Alex Sanchez claimed that regulation was driving smaller lender out of business, while comparing mortgage brokers to payday lenders and saying that brokers were barely regulated.

“One of the concerns that we have is that the (Wall Street) Journal reported in March that $31 trillion has moved from the FDIC banking world, which is very regulated, to the non-regulated shadow banking industry,” Sanchez said. “That’s bad news for Americans. These are payday lenders, these are mortgage brokers. No one’s really basically regulating these folks, and when Americans have to go to these types of financial providers, that’s bad news.”

Well, MPA readers were not amused by Sanchez’s comments. Many pointed out that brokers are subject to many disclosure and compensation regulations bankers don’t have to deal with. Others demanded Sanchez apologize.

“Very misguided Mr. Sanchez!!” wrote MPA reader MIKE. “We have to disclose every nickel we make, can't even lower our fee to compete where Mr. Sanchez can bank 6 points on a FHA mortgage where Brokers share the 6 points with the consumer, I see it EVERY single day.”

“I don't recall mortgage brokers ever having to pay the largest settlement to the government in US History, $16 BILLION, a la Bank of America, for screwing borrowers,” said another forum poster. “Perhaps Al ought to mind his own glass home before throwing any more rocks.”

“He knows we are better at originating mortgages than they are and he's trying to prey on consumer fears in a sad attempt to scare people away from brokers,” said MPA reader Michael. “We are very regulated, licensed, and audited to make sure that we are following all of the same rules and regulations the banking industry has to including AML/SAR. It was bankers and Congress that caused the mortgage ‘crisis,’ but he's beating the same old tired drum about how ‘scary’ brokers are. What we are is educated, regulated, serious originators of quality mortgage products ... and proud of it!”

What do you think? Does Sanchez owe mortgage brokers an apology? Should he publicly retract his statement? Tell us in the comments below, or on the original forum thread.



  • by Griff | 8/14/2014 10:55:42 AM

    Sanchez owes an apology on Faux News where displayed his ignorance in the first place.

  • by Buddy Arnold | 8/14/2014 11:01:00 AM

    Here is a response from one mortgage broker to Mr. Sanchez.


    You will receive many messages if not already from your “potentially unintended” (I hope) ignorant statements made regarding wholesale originations, and primarily comments about “ mortgage brokers”. I have already received many messages from strong reputable brokers across the country that are angry by this (in which I share in this frustration). You compared mortgage brokers to “pay day lenders” and that we are not regulated? I’m sorry sir, but you are highly disconnected with reality. I am hoping this was a mistake and the term was used by mistake, but not sure how that slipped.

    Not only are mortgage brokers the most regulated sector with regard to origination in the industry (and some of the most experienced and educated originators working in this sector), but if run properly wholesale broker operations is the only channel in which consumers are not steered toward specials interests and credit lines with hidden margin. All originators are TPO’s to the agencies and investors that buy or insure these mortgages, period. Lines of credit and smoke and mirrors must stop in selling inaccurate “titles” to the public.

    I would like to better educate you about our sector in which you clearly do not understand. Making public comments derived from assumed ignorance must be corrected and parties must be held accountable.

    I am ashamed this came from someone in our industry, motivated by all the wrong things. Any professional in this industry that takes a consumer-first approach strongly disagrees with your statements. Truthfully, you cannot debate facts or math and the benefits consumers receive through wholesale lending.

    Here is my commentary over the last several years on all the recruiting nonsense and sales in our industry below (links), but please carefully choose your words and commentary when speaking to the public for the protection of consumers served in the primary mortgage market.

    I am taking time away from a vacation to send this message providing the influx of messages I have received from people across the US as I am a wholesale advocate. I am happy to discuss these matters with you anytime.

    Andy W. Harris, CRMS | President
    Vantage Mortgage Group, Inc.
    15962 SW Boones Ferry Rd. # 100
    Lake Oswego, OR 97035
    503.496.0431 Ext. 302
    877.496.0431 Toll Free
    503.880.2427 Mobile
    866.438.5975 Fax

    Website | My Page | Reviews | Top 10 | Apply Now| Map

    3-Time Voted National Mortgage Professional Magazine's
    “40 Most Influential Mortgage Professionals Under 40”

    Andy Harris NMLS# 124161
    Vantage Mortgage Group, Inc. OR & WA State Licensed - NMLS# 35986

  • by Randy | 8/14/2014 11:03:16 AM

    Damn right he owes us a public apology. I find it hard to believe he is that clueless. I think this is a smoke screen he is throwing up in an attempt to divert the regulators attention away from him.


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