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ALL BROKERS ARE GONE!

By
Mortgage and Lending with D A Griffin Financial.LLC NMLS 6380

ALL BROKERS ARE GONE!

 According to Jamie Dimon of J P Morgan Chase ALL BROKERS ARE GONE in testimony to Ben Bernanke. In his list of things that have already been done to remedy the housing crisis citing that brokers are all gone was high on the list. Well, along with thrifts.   You can watch this clip at www.TBWSDailyShow.com

I love the look on Bernanke's face. Though there has been much discussion regarding the cause of the housing collapse, and granted the mortgage brokers have taken it on the chin, I think a lot of folks have come around to understand the real problem was the product, not the loan originator.

According to this video J P Morgan Chase bought out two large providers of sub prime loans WAMU and Bear Stearns. If Jamie Dimon firmly believes mortgage brokers were a problem selling the sub prime loans, then how does he excuse his company for their deep involvement in the sub prime loan business? Between 2005 and 2007 these firms along with J P Morgan Chase originated $295 BILLION sub prime loans.

Overall mortgage loan originations are way down, mortgage brokers increasingly are getting a smaller share of the market in large part I believe because they are being blamed for the mess. Mortgage brokers bring a very important element of competition to the market, their demise would not be good for the consumer.

By the way ALL THE BROKERS ARE NOT GONE! I'm still here and I'm not alone. We as a group do not have a large lobbying arm which is a problem in Washington, sadly. But there are plenty who have toughed it out and we are indeed the cream of the crop!

Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good post Dora.

Jun 14, 2011 06:43 AM
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

It is such a disgusting and tragic thing that has conspired against brokers. Were their bad ones? Hell yes! Are there good and bad real estate agents? Hell yes! A bad agent will not last long, their rep and actions will be their demise. However if you look at the trail of money one can easily see where the blame for the housing mess really lies...

Walls Street and its rating agencies!

They produced liquidity for the capital markets, they created and PUSHED their products to the community with one goal - get as much of this as you can and gladly took all they could get on board. I know this for a fact as one of the division heads of Bear Stearns came to me and discussed this openly for a product I said no to! The product was a interest only arm so a W2 STATED bwr with 580 score in a combo pkg 1M 1st with a 250k 2nd 100% LTV NO MONEY DOWN???? My guess is the shelf life of that was 90%+ 1st pay default and the other 10% within 5-6 months. You mean someone with a 580 score who could prove their income did not have to but warranted a 1.25M home NO MONEY DOWN???

They bring about the product, get the rating agencies to back them as being sound, they deliver them to market, the market place consumes them in a fever pitch, as any and everyone now can own a home with no money down and the more unscrupulous devise schemes to leverage this to buy a house become an investor and get a check at close???

The broker is the infantry man/woman. They are on the front lines, they don't create anything and have no money or control, all they have is knowledge of the "how to" and connections on getting the deal done. To blame them was easy. They are looked at as criminals (unmeritedly) they are unorganized and have no voice or muscle in Washington and they were a perfect fall guy for the banks as the broker went from nothing to controlling the origination's of nearly 70% of all loans made and they wanted that business!

WHY - because the banks were so foolish to let them in and once they got in they did a better job, were cheaper, were more customer centric and did a great job to open an industry.

The whole thing is a mess and anyone gloating at an industry demise is nothing short of disgusting. Chase is showing their character and I hope it comes back on them. Welcome to the new look America

Jun 14, 2011 06:47 AM
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

Post #2, I don't think I've ever read such a succinct descirption of the REAL problem. Hearing words like "all brokers are gone" out of Jamie Dimon's mouth is as you say disgusting!

When a consumer has access to this hypocrisy day in and day out it is damaging to the mortgage brokerages. As you say, there are good and bad in real estate and lending.

 

Thanks for the post, well done.

Jun 14, 2011 06:55 AM