Equity Home Loans

Will large mortgage banks like BofA, WAMU, drop their wholesale mortgage products?

[Please answer this question only if you are a mortgage professional, an MBA, a real estate professional, or someone in a similar profession who is very familar with mortgages] I'm currently an assistant to a mortgage broker and I was very lucky to have worked with one of the ethical mortgage brokers though I will admit that sometimes he over stated some asset figures. I'm not too happy about that--but he would give his clients the best mortgage terms on the cheapest basis. i.e. he didn't charge them points when he didn't need to. However, I'm hearing that the mortgage broker industry may end next year due to the alledged plans of several large banks like BofA (already did it), WAMU, Wachovia, Citi, Indy Mac, Wells, and so on. I've also noticed that these major banks are starting to expand their retail divisions thus making me believe that pretty soon we are aheaded towards a direction where mortgage brokers will become no more. Does anyone else out there believe this to be so?

Public Comments

1. One other reason you may hear that the broker industry is ending is because of H.R. 3915. This was passed, with revisions, by the House of Representatives.
2. H.R. 3915. is a bill that has passed but with modifications that still allow for brokers to have yield spread but with limiations on the points they can charge the borrower. IT DOES NOT MEAN THE END OF MTG brokers. However, it means that being a mortgage broker in the future will be very hard. Currently, BofA has cut it's wholesale division and other big banks are expected to do the same thing. But keep in mind that those banks will include those that have the means to do retail mortgages like BofA does. Wells and WAMU will perhaps be the next two however I doubt if ALL banks will do this. This industry goes through cycles and our next biggest challenge will be going against bank rates. Keep in mind that mortgage brokers throughout the next few years will have to deal with the image of being horrible criminals out looking for a quick butt rather then look out for the consumer. However, banks like BofA and Wells will screw up in the long run by providing higher interest rates on their retail mtg products anyway. I give it another 2-3 yrs before mortgage brokers are back in business. :-)