Hello, your Red Headed Mortgage Guy, Dave offering some interesting information.
I got this from one of my news sources that I found as an interesting read...ENJOY!
What is the agent/broker on the street saying? "The bigger problem that continues to persist is the expectancy of rates to drop. Last week after the meeting that is all you heard about. ‘Bernanke was a genius.' ‘This will make the banks have to lend.' The banks do not give two hoots. They are calling their own shots and probably laughing as they got what they wanted and no one regulated them. Now they still cannot drop rates because they are under staffed and cannot handle the volume. The big banks tell us to kiss their behinds because their books are more important than saving our economy. We should have let some more of the big banks tumble. This would have at least left some fear in the banking system that no bank is to big. So we are left with tons of people trying to refinance to save money and all they hear on a continual basis is that rates should be getting lower and we are left to tell them, no because the banks are not staffed well enough to handle the volume."
Brokers are wondering if they will become extinct. Frankly, I doubt it. Remember that mortgage investors are "for profit" institutions. If a particular investor, such as Bank of America or Wells Fargo, decides that their wholesale channel brings in an acceptable volume of business cheaply, compliments their other business lines, and contributes to their bottom line for servicing as time passes, they will keep that business channel. If, on the other hand, the investor decides that the risk/reward ratio is not acceptable for the amount of capital involved, they will scale back or dismantle the operation, such as what Citi and Chase have done. Remember that the wholesale line of business actually sprang up in the 1970's and early 1980's to meet the needs of lenders (mostly savings and loans) who didn't have the network to do enough loans. But most S&L's are gone, and as I mentioned yesterday the large investors have huge branch networks to not only handle deposits but also bring in mortgage loans. It still comes down to what makes sense for the bottom line with any investor. The key to this paragraph is that Brokers may not come extinct, however they are being crippled by the lack of money sources.
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