Mortgage Loans | Mortgage Loans
Public opinion against mortgage brokers is a an all-time high now that the bank's media spin-machine successfully pinned the blamed in the meltdown on home loans. Every State legislator in the united kingdom got re-elected during the last several years promising sweeping mortgage loan officer reform. I wrote about how precisely rare it's to listen for a media story or perhaps an industry professional say something nice about lenders.
Heck, I'd settle for a story which was simply accurate!
Mortgage Brokers Marginalized
One of the biggest over-reactions politicians will need to the mortgage crisis is sweeping State and Federal legislation putting truly unreasonable restrictions on mortgage brokers...restrictions banks won't ever see!
It's happened in my State of Colorado. What use to become State too lax in regulating mortgage brokers has now gone overboard coming out with a brand new requirement every few months. The very first regulation was the background checks and also the surety bonds. Then came the O&E insurance and testing requirements all designed supposedly to "protect the public" much more reality it's only another way to consolidate the mortgage market in the hands of only a few mega-banks.
All this bad press and regulatory red-tape has pushed a huge number of good folks from the business and marginalized the reputations of those who remain.
Mortgage Market Dominated By Five Banks
Paul Muolo writes,
"We can all sleep again, knowing that the important boys are stable, and together control 67% with the mortgage market in terms of receivables on first and second liens. Here's the way the servicing numbers shake outside in regards to share of the market: Bank of America (21.68%), Wells Fargo (17.65%), Chase Home Finance (15.09%), CitiMortgage (8.49%) and Residential Capital LLC (4.14%).
Now for the not so good news: the top five control 67% in the residential servicing market, meaning in my book most of these firms are "too big too fail" the same as Fannie and Freddie were. Consider it for any second: what if something goes wrong with Bank of America, which now services $2 trillion home based mortgages for American consumers? I am not saying Bank of America is in danger financially but we've made a overall economy - for better or worse - where excessive risk is incorporated in the hands of an inadequate number of. There's something wrong with that."
Did you catch that?
The top five banks now control almost 70% from the mortgage servicing market...and it is not over!
Putting the blame on banks for the mortgage crisis informs me they've their eye on dominating the retail side in the market at the same time.
Will Mega-Banks Take Over Retail Too?
Paul is a smart guy and wrote among the best books on the mortgage crisis available called Chain of Blame...in case you really want to know who caused the crisis...don't read media stories...read that book.
Paul's contention we have been creating another "too big to fail" concern is well taken, but I'll go one further. The devastation towards the mortgage loan officer side of this marketplace is real and if the battle to the retail mortgage marketplace is lost to a meg-bank propaganda campaign, it's the consumer that will suffer most.
As we let these mega-banks "win", the cost of getting a mortgage will skyrocket.
Law makers and reporters needs to be watchful to never be converted into a dupe to the banking industry.
At once mortgage brokers originated 70% of most first mortgage applications, but the continuous hatch job financial institutions perpetrated with the media assuring legislators is the specified effect. Mortgage originations have become 60% in favor of banks...a large switch within a couple of years.
I am not proclaiming that banks did not deserve the unhealthy press. Many of them did...but certainly not all. Needless to say, it's not easy for the average mortgage consumer to see the main difference between "good guys" ands "bad guys" with regards to lenders. We could help on that front. We instruct people finding ethical, professional mortgage brokers every single day with your website, articles, and reviews.
If consumers don't patronage the tiny business, local lenders, even "good guys" may give up soon. In the event it happens the top banks will have won the war.
GoshMortgage Loans, I hope not!
