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Stop pointing the finger at brokers

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Mortgage Professional America | 21 Jun 2013, 08:05 AM Agree 0
Brokers are tired of acting as scapegoats for the financial meltdown and shoddy lending practices, an industry leader has said
  • Griff | | 21 Jun 2013, 09:06 AM Agree 0
    Good article!
  • Shali Sheth | | 21 Jun 2013, 09:27 AM Agree 0
    Thanks a lot for understanding pain in behalf of all brokers and wish this issue can be take to white house.
  • Sam Hobbs | | 21 Jun 2013, 09:36 AM Agree 0
    It has been clear to anyone who wanted to hear the facts and not point fingers who played a part in the mortgage meltdown.

    Brokers, Loan officers Direct Bank or Mortgage company mortgage officers, Big banks, smaller lenders, Wall Street, Investors reaching for high yields all pushing limited verification products, many many actual borrowers, Appraisers, Politicians pushing lenders and the agencies to make mortgages all played a big part in the meltdown.
    Certainly not all of any of the groups are to blame but none of them are completely innocent either.
    IF ANY ONE GROUP of them had done completely the right thing 80% to 90% of the problems would have been avoided. If TWO groups had done the right thing it would hard to imagine how we would have ever had an issue.
    Trying to assign a percentage of blame is hard. But there is no such thing as a "little bit honest" but the next guy was worse so it's okay what our group did.
    I have been a broker for over 20 years, previously with a large lender for 15 years and a consumer for at least all of my adult life. It was easy to see this coming but greed by some or many in each group listed above caused the meltdown. For any of them to deny or try to defend all of their groups is just plain garbage.
  • Nav Thakur | | 21 Jun 2013, 09:40 AM Agree 0
    Just another example of someone at the top of a bank not knowing how the business works. Set the bar high?! Really come on mortgage officers that work for banks have less standards and requirements to be employed than we do.
    Ultimately though Chase's stance is bad for small business and bad for our economy and it's clear their leadership fails to recognize this.
  • Marty Stroiman | | 21 Jun 2013, 09:56 AM Agree 0
    Let the truth be told!
  • Gary J. Heinecke | | 21 Jun 2013, 10:03 AM Agree 0
    This article is right on. I have been saying this for years. It is obvious the big bullies concerted to put brokers out of business. I would deem this a true ANTI TRUST VIOLATION. I worked for Jamie Dimon in the Citicorp days and he was a beligerant , horses pattoot then. Whoever would think he would change after putting himself on the Federal Reserve Board. Take note street banks are going to become competitive enough based on unfair advantages given to them through the FEDS AND AFTER removing our Wholesale outlets like Countrywide. All I have to say is you reap what you sew and I will not be the final judge.
  • Melinda | | 21 Jun 2013, 10:08 AM Agree 0
    I totally agree.
  • Alette | | 21 Jun 2013, 10:11 AM Agree 0
    Great point. So wonderful that someone is point that out finally. If the products were not created that encouraged fraud brokers never could have sold them. I never did stated income mortgages and the underwriters at the big banks couldn't believe it and many times made comments that indicated they thought I was nuts not to just make up income.
    So for years the honest brokers lost business because of the lenders that would give a mortgage to anyone that was breathing. Back then when I'd contact the DRE or local DA about the criminals I'd be told that they didn't have the time or ability to go after them. I tried and tried. Now after they've pretty much driven them out I get to pay for all their crimes with having to three times as much work for one transaction. There are honest brokers out there that are experienced and valuable originators that provide a true service to consumers. We also provide an alternative to the large banks who, without competition, would be price fixing interest rates to benefit themselves.
    All parties were to blame for the mortgage melt down. Pointing fingers at the low man on the totem pole while making themselves out to be innocent is disingenuous.
    Thanks for going to the trouble to point this out. It's been way too easy for banks and government to blame mortgage brokers.
    It's time for it to stop.
  • Steve Felt | | 21 Jun 2013, 10:26 AM Agree 0
    Great point, and I can only assume that our lobbyists are horrible compared to the Realtors who are still able to charge 6-7% in fees to sellers. Now that's usury!
  • Steve Felt | | 21 Jun 2013, 10:30 AM Agree 0
    Great point, and I can only assume that our lobbyists are horrible compared to the Realtors who are still able to charge 6-7% in fees to sellers. Now that's usury!
  • Joe Stroud | | 21 Jun 2013, 11:36 AM Agree 0
    If you can't earn customers with quality products, quality service, and fair pricing then the only option left is to legislate customers... and so go the banks.
  • Joe Stroud | | 21 Jun 2013, 11:39 AM Agree 0
    If you can't earn customers with quality products, quality service, and fair pricing then your only option is to legislate them...and so go the banks.
  • Mary | | 21 Jun 2013, 11:53 AM Agree 0
    I remember when our current President made a public speech stating that the Brokers were to blame for the Banking meltdown. Thank you Mr. Savitt for speaking on our behalf!
  • Appraiser | | 21 Jun 2013, 01:24 PM Agree 0
    Replace Loan Broker with the word Appraiser. We are also their scrapegoat, and no, as there were some bad brokers who found the necessary partners, not all appraiser's bought into it. Many fraudelent appraisals were not produced by a licenced appraiser but by persons who would make the ill gotten gains. Many were found to be made up pieces of paper, no licensed appraiser involved, never reviewed or verfied. We also suffer now with too much regulation, from GSE's who think all homes fit into there square hole scenario's.
  • Wm Matz | | 21 Jun 2013, 03:04 PM Agree 0
    Here is an excerpt from an article I wrote in 2010:

    "The American banking industry has engaged in a despicable campaign to place the blame for the mortgage crisis anywhere except on its own doorstep. In 2008, Chase CEO Jamie Dimon tried to blame the crisis on mortgage brokers. But his ill-considered remarks ignored the following:
    • Who created the mortgage programs that caused problems? The banks!
    • Who underwrote the mortgages to ensure quality control? The banks!
    • Who trained the brokers/mortgage officers on mortgage requirements? The banks!
    • Who controlled pricing and allowed predatory terms/rebates? The banks!
    • Whose mortgages have a higher level of fraud? The banks!
    • Whose “whiz kids” designed many destructive derivatives? Chase!*
    (*See Fool’s Gold by Gillian Tett for the full story.)
    Incredibly, in his testimony to the Financial Crisis Inquiry Commission in early 2010, the highly-regarded Dimon, a Harvard M.B.A., admitted, “We never stress-tested our products for [a large real estate price decline].”
  • steve weber | | 21 Jun 2013, 03:40 PM Agree 0
    wow just look at Bank of America with the robo signing and telling customers trying to do HAMP that their mortgages were in process when in fact the employess were told not to process, also Bof A was charging service fees onclosed mortgages to investors, why are they not in JAIL!!!
  • Wanda Martin | | 23 Jun 2013, 07:04 PM Agree 0
    Thank you so much for this article. I wish it could go upstairs. I have been a small town mortgage broker for 22 years. Same place, same name, same employees. We survived it all. Some times were tight. The lenders would not turn down mortgages even if you asked them to. If we wouldn't do a mortgage for a Realtor or homebuyer they would go somewhere else.

    There other most unfair portion of this new world is how unsulting it is to borrowers with real entgriety, honesty, good credit and excellent credit histories. Where is the common sense underwriting we used to have.
    Next let's talk about the credit bureaus and creditors that throw a small balance (under $100) on someones credit report and ruin their scores. This should not be allowed.
  • BJ - mortgage broker | | 26 Jun 2013, 04:37 PM Agree 0
    I am a honest, small town broker in NV. I've weathered the storm, but the neverending leglislation is mind boggling. I STILL have to explain the 'new GFE' to clients who tell me it doesnt make any sense. (Thank You Dodd-Frank) lets just hope this jerk from Chase doesnt take over Bernanke's job or we'll all be facing an early retirement
  • Dan | | 28 Jun 2013, 09:32 AM Agree 0
    Mr. Hobbs

    Probably just an oversight on your part, but you left out real estate agents and the home buyers themselves. Certainly, they too had a hand in creating the mess!
  • Bill Wilbanks in Florida | | 01 Jul 2013, 09:01 AM Agree 0
    I've known Sam Hobbs for 35 years and can say without reservation both he and I are two of the old school straight arrows. That's from a time before 06 thru 08 when most brokers were. When it was rare that a licensee was found to cross the line. And that has held true even when wholesale lenders walked in both our places of business on a daily basis for 4 to 5 years and told us we were "crazy for not pushing the NINA and Neg-AM products at every opportunity. Look at how much much money is there to be made". He didn't forget anyone...the list was simply too extensive to mention every player at fault.

    I asked an underwriter on many occasions during that period what they really thought about home values on an appraisal jumping $30k, $40k, $50k and more in less than 6 months...the answer in almost every case would be "it's crazy...but the comps back it up and I'm underwriting to company guidelines"...right! Don't even think of turning a mortgage down for value or questionable income or assets. That source would drop you like a hot potato. I even heard stories of realtors driving through neighborhoods stopping to ask people who were working in their yards if they wanted to sell this beautiful home or knew anyone that did. Remember the lot lottos the builders put on across many markets? Yes it makes me sick to listen to these hypocritical jerks trying to feather their own beds by making false accusations against my industry. Where were the state licensing bodies that saw broker licenses climb by 75% during that same 3 to 4 year easy money period and then see them plunge in numbers to 20% OF THE PEAK WHEN IT HIT THE FAN IN 2008? Who was left to try to survive after that?...the same core of professional mortgage brokers who had run their business ethically for 30 to 40 years before the herd jumped of the cliff. And they did 65 to 70% of all mortgage business with less than 1% delinquency for decades! The crazies are now in control of the nut house. Now we have buyers making overbids again and finding that there are multiple shoppers doing the same. Already seeing issues on appraisals unable to backup the over bids...who will they blame for that one?
  • Rich | | 17 Aug 2013, 03:29 AM Agree 0
    Like the broker/correspondent banker, appraiser, title company etc, real estate agents and borrowers were closer to the transaction than a survey company and everyone else on the list.
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