No More Funds for Mortgage Brokers? Not Yet...

By
Services for Real Estate Pros with Shorewest Realtors

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.

 

 

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Rainer
19,170
Josh Holt
RE/MAX Coast To Coast~ Dedicated to You! - Berwick, ME
Southern Maine and NH Real Estate - Your Source of Info on the Berwicks

Becky- So many changes. I see more banks pulling out of this (BOA and Countrywide are already gone I believe), then going back into it once they figure out how to regulate the loans written by brokers.

Jan 15, 2009 11:26 AM #1
Rainer
42,600
Becky Brand
Shorewest Realtors - Oconomowoc, WI

Josh - thanks for the comment.  I feel for the ethical loan officers and mortgage brokers out there - obviously there were brokers out there doing things right.  I would like to see some of the brokers out of business who took some of our buyers for a ride.

Jan 15, 2009 12:15 PM #2
Rainmaker
1,056,196
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Interesting I had not heard this news. It seems there are changes in the mortgage industry daily!

Jan 15, 2009 01:45 PM #3
Rainer
54,240
Barbara Delaney
Park Place REALTORS, Inc. - Roanoke, VA

Dear Becky,

Thanks for the info. I will definately be checking this out tomorrow!

Barbara

 

Jan 15, 2009 02:23 PM #4
Rainer
42,600
Becky Brand
Shorewest Realtors - Oconomowoc, WI

Barbara and Bill - it's thanks to my in house lender that I heard the news.  Thank you for reading my post and commenting.

Jan 16, 2009 01:01 AM #5
Rainmaker
671,751
Sandy Shores FL RealtorĀ®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Becky, Thanks for the great information. I have to check this out further.

Jan 20, 2009 09:40 AM #6
Rainer
42,600
Becky Brand
Shorewest Realtors - Oconomowoc, WI

Thanks for the comment Sandy - I also just heard that legislation was reintroduced to allow seller assisted down payment programs again.   We'll see what happens!

Jan 20, 2009 01:30 PM #7
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