Mortgage Brokers May Soon Face Extinction

Everyone knows that the mortgage crisis was caused, at least in part, by a large number of sub-prime loans with adjustable-rate mortgages (ARMs) that reset, leaving borrowers unable to make their payments. Browse this site listing about Wealthy You
We also know that such services were offered by major banks, partly in response to federal government requests to assist low-income families in purchasing homes.

So, who are the banks blaming? That’s who: mortgage brokers.
The banks devised the loan plans, set the terms, and made them available to the general public via mortgage brokers. They also sent representatives to mortgage companies to market their services and educate brokers about the many advantages they provided.
The applicants were then accepted by the banks’ own underwriters. And now it’s the mortgage brokers that are to blame?
One of the reasons why banks like JPMorgan Chase and Citi Bank have severed relations with mortgage brokers is because of this misplaced blame. Another explanation is that they feel their own loan officers are well prepared to assist borrowers in assessing their loan options and making the best decision possible. It doesn’t matter that people of certain areas will have to apply by phone or online.
Some banks, such as Wells Fargo, also feel that negotiating with mortgage brokers is better for the public than going from bank to bank to apply for a loan before comparing rates and conditions. After all, brokers can shop for loans at a variety of banks, even though that variety is dwindling on a daily basis. Brokers can also transfer a loan from one bank to another if they run into an underwriting problem.
Furthermore, a customer feels more at ease when speaking with a local broker. Mortgage brokers are more likely to spend time answering the same questions over and over, assisting customers in understanding and gathering all of the documents that a bank needs, and also explaining information at the closing table.

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