Are Loan Brokers A Dying Breed?
If we believe what we read from various sources loan brokers are facing a bleak future.
A number of reasons are often cited: restrictions on yield-spread premium payments, new national registration requirements and licensing costs, and a general lack of interest on the largest remaining wholesalers in growing their broker channels.
According to one source the number of brokerage firms could be down to 15,000 from a high of 54,000 three years ago. Let keep in mind however, that many brokerage firms are small "mom and pops" employing less than five people, and sole proprietor operations.
There is a ray of hope however in the industry's future. The main reason is costs.
Brokering is a form of outsourcing for lenders; it costs the wholesaler nothing in terms of fixed salary costs, etc. Keeping full-time loan officers is expensive. When a brokered loan doesn't close the broker doesn't get paid by the wholesaler. Time will tell if better quality control systems will give lenders the level of confidence needed to reinter or expend their current wholesale channels.
Until then, it is going to be "a survival of the fittest"
Guy Barre
Senior Mortgage Advisor
Office: 310-454-6061
Cell: 310-849-3656
Fax; 310-459-07683
In California www.jumboloans.com
Nationwide www.realprohomeloans.com
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