What's the hold up with these low rates...

By
Mortgage and Lending with Landover Mortgage

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.

Landover Mortgage is a Mortgage Banker.  We have direct lines with some of the major banks.  Give me a call and see how I can help you with your mortgage needs.

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Tags:
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pierce county
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Rainmaker
78,480
Shannon Ziccardi
"A Quick Note" ...in Tennessee! - Clarksville, TN
"A Quick Note" Mobile Notary ...in Tennessee!

Hi Dave!  caught your tweet leading me to your post...while perhaps factually correct, I'm mostly concerned about the "tone" of your post... I've seen business take a drastic ramp upward since January '09 and loan apps are through the roof!  In fact, escrow companies and mortgage lenders alike are scrambling and working very long hours (at least here in CA) as their infrastructure is not what it was when things went south.  Indicators are that things will be even better the closer we get to mid-2010. 

I know it's rough, but please don't give into the doom and gloom that so many perpetuate.  We all know that the solutions being offered by our government are questionable.  I try constantly to look for the positive and the opportunity and to look for the good news while tamping down the negativity.  I believe that 2009 [and NOT 2010] will be the year that things come back.

"A Quick Note"

www.aquicknote.net

Mar 27, 2009 10:08 AM #1
Rainmaker
382,670
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Dave: Didn't Bank of America ALREADY close their wholesale channel?

:)

Mar 27, 2009 10:39 AM #2
Rainer
6,153
Dave Andrews
Landover Mortgage - Gig Harbor, WA

I was not trying to give the impression of "doom and gloom" as much as I was trying to inform people the consequences of waiting.  I was also giving the reasons why people are experiencing longer escrows.  I have seen an uptick in business.  It's a GREAT thing.  However, people need to understand what's causing the longer escrows, as well as why waiting for "mythical" interest rates may hurt them in the long run.  Thanks for the comment.

Mar 27, 2009 01:11 PM #3
Rainer
6,153
Dave Andrews
Landover Mortgage - Gig Harbor, WA

Bank of America was actually one of the first to shut down their wholesale channel.  They actually did it a few years ago.

Mar 27, 2009 01:12 PM #4
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Rainer
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Dave Andrews

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