Earlier this week Bank of America announced that it plans to close its Correspondent Mortgage Division. Jumana Bauwens a spokesman for Bank of America stated that “As part of our ongoing activities to align the Bank of America Home Loans business to the bank’s customer-driven strategy, we have made the decision to exit the correspondent mortgage lending division,” This is not good news for an already ailing Lending Industry, but many Correspondent Lenders brought this on upon themselves.
Correspondent Lenders in my opinion have constantly pushed the envelope with some loan products, and as a result have put Bank of America in a financial pickle. Bank of America should have rejected many of the risky loans that Correspondent Lenders were sending them, but they did not and now find themselves “under fire from a series of suits by investors over bad mortgage-backed securities”. As of June, as much as 27% of their outstanding claims were produced by Correspondent Lenders who are no longer in business, thus leaving Bank of America without means to recover those funds.
News like this is never good, but it does strengthen the conservative position that Direct Lenders like McCue Mortgage took with both their Retail, and Wholesale Lending Divisions. While Bank of America was boosting huge numbers of loans, we held our ground, and refused to underwrite questionable loans. This did not make some of our Realtor Partners or Brokers who were placing their loans through our Wholesale Division happy, but it was the right decision even though it cost us business at the time.
Because of the position that we took, we are in a healthy financial position today. Those that criticized us for the conservative position that we took are now sending us their clients once again, because the others are no longer around. We continue to evaluate our Lending Policies, and make changes as needed.
We celebrated our 60th anniversary this past year, and we plan on being around at least another 60 years servicing the mortgage needs of Connecticut Homebuyers. At McCue Mortgage we not only make sure that we meet FHA, Fannie Mae, and Freddie Mac Guidelines, we also set our own lending standards if we feel that FHA, Fannie Mae, and Freddie Mac are taking risks beyond what we are willing to take.
So even though Bank of America’s decision to shut down their Correspondent Lending Division will most likely reduce the number of Correspondent Lenders out there. We and other Direct Lenders like us are here to assist, and hopefully bridge some of the gap that will be created by Bank of America’s decision.
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Who To Call For Your Mortgage Needs In Connecticut:
George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 begin_of_the_skype_highlighting (860) 573-1308 end_of_the_skype_highlighting gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.
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