I just picked up on a New York Times article–Banks Bypassing Mortgage Brokers. In essence it talks about the emerging trend of big banks closing down wholesale and correspondent divisions. This is a very concerning issue.
Not only will this have obvious effects on thousands of mortgage industry jobs, but it will directly hit the new home buyer and borrowers attempting to refinance mortgages. Mortgage brokers are about 65% of the mortgage market, both in originations and client databases. That’s right these folks are the direct relationship to the vast majority of mortgage borrowers.
For years banks have focused their attention on funding and servicing loans, not explaining and counseling customers on mortgage finance. Taking them out of the process will leave most borrowers in a void of information and education. Potentially, this will increase the problem with borrowers in the “wrong” mortgage financing.
What do you think the impacts of this trend will be to consumers?