If you haven't already heard, JP Morgan/ Chase has announced that they will no longer be funding loans originated by Mortgage Brokers (those companies that do not use their own money to fund loans at the closing table) effective this Friday, January 16th. Chase is one of the largest wholesale sources of mortgage funding to the broker sector. Many in the industry feel that this is the start of a trend and that many other major wholesale sources may follow suit and cease funding loans originated by Mortgage Brokers.
What does this mean to you? If you are a consumer who has already applied for a loan through a mortgage broker, you should check with them to verify that they have viable funding sources. If they don't, please ask your Realtor for a referral, they will know who will be able to guarantee funds. If you are an agent with buyers using a mortgage broker, contact your buyers and have them (or perhaps you for them) check with their mortgage broker.
A word of caution, this does NOT apply to mortgage bankers, those companies that fund their own loans and then resell them to wholesalers. Shorewest Realtors is fortunate enough to have in it's family of companies Wisconsin Mortgage, a Mortgage Banker with a stellar relationship with many wholesalers. In fact, as the lending landscaped has shifted this year, Wisconsin Mortgage has been able to help numerous buyers who, for one reason or another, found themselves just days before closing unable to close. Often times, those buyers needing last minute help go from application to closing in a week or less.
The lesson here? Both consumers and agents must be diligent in keeping up with the changes in the mortgage industry and consider who controls loan funding when choosing where to get their loan.