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Mandate or Agenda: What’s behind the CFPB’s anti-Broker sentiment?

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  • William Matz | | 12 Aug 2012, 05:32 PM Agree 0
    I strongly agree with Marc and raised many of these points in my October 2010 Niche Report article. My greatest concern remains the disparate impact of all of the "reforms" on brokers versus bank mortgage officers.

    The fact that all of the "reforms" only have significant effect on brokers has had the cumulative effect of greatly increasing bank share of home mortgages. The concentration of origination in "big banks" has an obvious anti-competitive, anti-consumer effect. E.g. I was just in a Chase branch that advertised 30 fixed at 3.625% for one pt. Checking just one of my lenders, I could do the mortgage 2-3 points LESS. And that is consistent with similar comparisons I have run with B of A. Not only are banks charging consumers more, but their LO's still have no requirements other than NMLS registration; so the banks can get desperate NMLS-failures at low splits, doubling bank profits. It's almost as if the "reforms" were designed to boost bank profits at the expense of consumers.
  • Time4change | | 13 Aug 2012, 07:42 AM Agree 0
    A few years ago I heard of a "theory", which I did not consider very seriously that Washington's goal was to eliminate brokers because banks have overseers and all they would have to do then was rein in correspondents. Much easier than wrangling numerous brokers as well. Regs would be easier to write and they could fit all parties.

    I was wrong. It fits. Whereas there are investors besides banks who want to do business with brokers. Watching the CFPB, Dodd Frank, HVCC, and now banks limiting compensation there just does not seem to be an end. Our industry has been under attack for a few years with no end in sight. Countless careers have been lost. Meanwhile, CEO's who caused the problem move from one job to another.
  • Melanie Thompson | | 13 Aug 2012, 07:54 AM Agree 0
    I agree with both Marc and William. The bias of those in the CFPB and government in general against the broker is dumbfounding given the studies published by Georgetown and Harvard that clearly show that brokers provide less expensive financing than retail lenders and banks. Consumers benefit with open and free market competition yet so much out of DC is hell bent on eliminating choice and competition (and in this instance, the mortgage broker). Is it the goal of government to consolidate all mortgage originations into the campaign contributing banks in order to achieve more control of the marketplace? DC can be counterintuitive beyond the point of being absurd, and biased to the re-election and lobby machines, with no concern of consumer harm.
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