Beaverton Oregon Real Estate: The 80 / 20 rule does apply to mortgages now and the consumer is losing!

You all know the 80 / 20 rule, right? Well, does that apply to mortgages and banking in Beaverton Oregon or anywhere else for that matter? If you don’t know what the 80 / 20 rule is, that is where 20% of the people do 80% of the business. However, in the mortgage business that wasn’t the case two years ago.

Two years ago I was told that 80% of the mortgages were being done by brokers, while the 20% was being done by the large mega banks. Now, fast forward to today, where those numbers have been reversed and the mega banks are now doing 80% of the business and the brokers are only doing 20% of the business.

Now, how does this all tie together with the title? You see, when mortgage brokers did 80% of the business, they were always shopping for the best deal for their clients. They even would move the appraisal to a new loan to help save the client money. You can about read about that on my post titled, “Predatory lending is now even easier and banks are taken full advantage!”

But, is there more they are doing to get the consumers to not shop around when looking for the best deal on Beaverton Oregon real estate? You see, the mega banks are, I believe, working with big government to put regulations in place for brokers, blaming them for all the foreclosures. They are saying that look, 80% of the homes in foreclosure were done by brokers, so let’s make it harder for them to do business. Once again the government has fallen into the “Wow, those numbers are huge, we have to do something” scam.

Of course 80% of the homes in foreclosure were loans done by mortgage brokers, because they did 80% of the business. So, the mega banks have gotten it so now, the process is so hard that mortgage brokers have been forced to close up shop and join the work force of the large mega banks or basically leave the business. Not great choices for most mortgage brokers I know. They became brokers so they could work for themselves and their clients, not for big banks.

But, the problem is, the real ones losing in all this, is the Beaverton Oregon consumer. The mega banks aren’t going to shop their loan. Once they are locked in at a rate, they are going to be stuck there even if rates drop or another bank could offer them a better deal. Why should they? They have all the power now, they have their own appraisal departments, so unlike a broker, they don’t have to go through these middle management companies to get an appraisal done.

Think about gas prices as less and less small, independent gas stations went out of business because the larger ones priced them out of the business. Once they were gone, they were able to set their own prices which were of course higher and now the poor oil companies are making record profits.

So, why do all the government plans that are supposed to help, always seem to hurt the consumer rather than help them? Maybe the government should start asking the people working in the trenches how things can be changed for the better rather than talking to a lobbyist or bank president that doesn’t have the consumer’s fiduciary responsibility as his first priority. His first priority is to make the stock holders happy and to do that, they have to make a bigger profit and that always come from the consumer. 80 / 20 rule isn’t always the best thing for business.

Todd Clark (broker w/ Ken's Home Team)
Keller Williams Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)746-9573

 

 

 

 

 I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard. All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.

 

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