Mortgage brokers sell loans to banks.  They don't fund the loan themselves.  They basically re-sell bank products.  In other words, "banks" have always determined which programs are available, and it was, to an extent, based on the appetite of the ultimate investor. 

Those investors (Wall Street investment houses to a large degree) have made billions while there was an appetite for the loans.  When the demand dried, their appetite ceased.

The changes in the mortgage industry impact everyone.  Finding a reputable banker to help you grow your business and you'll do just fine. 

Great post!  You are so right.  Also, I feel bad for the consumer who now have very little options. 

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