Is the business of broking mortgage loans dead? About two years ago, Morgan Brown predicted our demise on Blown Mortgage. His conclusion was that the industry would need a scapegoat for the poor lending practices and that “blaming” mortgage brokers was convenient (and not necessarily fair). His conclusion suggested that the big lenders were trying to gobble up market share to the detriment of the consumer.
Morgan predicted that the brunt of the regulatory changes would be aimed squarely at the mortgage broker; he was correct. He predicted that the big lenders would tighten up their standards and practices in the wholesale lending channel; he was correct.
That scheme backfired on the big banks. Congress is really pissed that they haven’t been doing more with the TARP funds federal largesse to make loans and they are coming down hard on whom President Obama calls the “fat cat bankers on Wall Street”.
Bawld Guy Axiom: Lenders Lend
Brady Corollary: Lenders lend unless it’s more profitable to do something else.
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