Mortgage Broker or Direct Lender, broker vs. bank for mortgage

A friend that is a mortgage broker sent me this link a few months ago and it was scary to see the number of lenders closing daily. In fact, we were talking and she was just looking through and found out a deal she was working on wasn't going...lender was out of business as of that day. Of course, she still closed her loan, but she had to scramble to find another lender.

I just read your comments and I got to tell you the site you are referring people to is questionable at best........I was a mortgage broker for 15 years, and am a direct lender with WFB now, and the arguments you make may have been true before the mortgage meltdown but I will tell you first hand, I am very glad I am a direct lender right now....contrary to what you say here (that a mortgage broker can keep the file alive when the wholesale lender or bank goes out of business is very flawed....). It used to be true that the advantage of the mortgage broker was a pool of lenders with great competive rates, what is true now is that the mortgage broker has less and less wholesale avenues and very little control of the transaction and the ever changing guidelines....the direct lender (especially WFB where 75% of my brokered biz used to go) now has the money, the control and the loan officer (I am a Private Mortgage Banker with underwriting authority) knows the guidelines before it even hits the broker street, and the direct lender is making the decision anyway (not the broker) so the approval is coming directly from the bank instead of being filtered thru a mtg broker....I am not saying a great mtg broker isnt an incredible ally, just that it is not the best option in this current market 75% of the time!