We have seen folks in my profession come and go due to market conditions and even though 99 banks have failed since Wall Street handed to us this financial calamity, it does not match the 500 or so banks that failed back in 1989 (Savings & Loan) however today the situation is worse now than it was then.
According to the State of Washington Department of Finance, the number of licensed loan originators in December of 2007 was at 13,722. December 2008 - 7,863 and 4,597 renewed for 2009 and I'm guessing the number of active licensed loan originators is lower than the number of '09 renewals as I sit here today.
It is likely the trend we see here in Washington is repeated all across America and consumer access to seasoned experienced professional loan originators will diminish and history tells me this cannot be good for the consumer.
In the ‘old days' the consumer had banks only. Banks were slow (took 90 days to close a simple deal) they charged more up front fee's (2% origination fee) and of course the spread on their money was terrific...(sounds like the insurance industry today). They had their own little cozy non-monopoly monopoly...remember?
According to the Office of Financial Management for the State of Washington our population is around 6.5 million. My experiences in the banking system, mortgage broker system and now mortgage banking system confirm home owners or potential home owners living here or moving here need to focus on finding an experienced professional and that will not necessarily be found at your bank or credit union.
When mortgage bankers and brokers came along not only could the consumer find lower interest rates compared to their local bank or credit union, they found quicker turn around times plus trained professionals providing consumers a cost analysis to confirm the decision they were making was in their best interest.
The mortgage banker and broker industry developed software and delivery systems superior to the banking industry the result was (prior to the Wall Street calamity) over 60% of the consumer relied upon the mortgage banker or broker for their mortgage and management of their equity resulting in higher satisfaction than any bank or credit union could deliver.
For those that are looking to buy for the first time or again, refinance or for those that simply need guidance on how they should be managing the equity of their home, searching for the seasoned loan originator should be their focus.
There are tough times ahead for the consumer because of the ridiculous regulation and underwriting atmosphere (see my blog on the new good faith estimate) plus lenders continue to extort money from the consumer based upon the discriminatory practice of our current credit scoring system. The banking lobby is stronger than ever trying to force us (mortgage banker and broker) out of business with the backing of Barney Frank and others.
I have been in the mortgage industry over two decades and watched our economy go up and down. I have watched industry production expand and contract. Witnessed the decimation of entire sectors due to 'irrational exuberance' bad behavior or fraud perpetrated by Enron and others. Finally I have witnessed the lack of government oversight including the various agencies responsible and no matter what party is in power fail miserably.
So the challenge for the consumer looking for a home loan is the limited access to a professional - seasoned - licensed mortgage professional. There are a few of us out there and I happen to be one of them.
I recommend you write your representative in DC and tell them you want fairness and competition not more regulatory non-sense (see previous blogs) and most important tell them to slam the door on the bank lobby while they are kicking out the insurance lobby. Are you with me?
http://activerain.com/blogs/kirkwilliams
I wish us all well.
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