Banks eliminating role for mortgage brokers

JP Morgan, for instance, will now accept loan applications only from its retail branches. This is the same firm that sold investors a triple-leveraged deal in Walt Noel’s operations and then pulled its own money out when it figured out the Ponzi going on but didn’t warn its clients. Its claim that it won’t deal with brokers because it can better serve its customers in house rigs just a bit hollow. Good mortgage brokers could shop 5-10 different lenders and come up with the lowest rate and their presence in the market place kept the banks competitive. If borrowers must now make separate applications at each bank, paying a separate fee at each, the only winner will be the fine people at institutions like JP Morgan. Fortunately, we know how honorable and trustworthy they’ve proved themselves to be, but do we know that about every lender?

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One response to “Banks eliminating role for mortgage brokers

  1. A Frank Lender

    I’m a private, commercial lender but I’m very familiar with residential brokers as we looked at a couple of them to possibly buy during their heyday so I’m very familiar with the business…

    To be sure, there are some disreputable mortgage brokers, as there are disreputable people in every business, however, most loan brokers by far are honest and hard-working – that’s how you get repeat business. So unfortunately, I think they have shouldered a more than unfair portion of the blame game that’s going around.

    If JP Morgan tells their (formerly) huge broker network “hey, we’re looking to do jumbo mortgages for people with poor credit scores up to 95% of value AND you don’t have to verify assets or income AND we’ll pay you at closing” than JP Morgan got what they asked for.

    So now, yes, as you say JP Morgan is effectively saying they don’t want their borrowers to be involved in a competitive process.

    Our TARP dollars hard at work once again…