We just had to share with BuzzPost regulars that we received an avalanche of negative response to an earlier story we ran covering a CRL study that allegedly found that brokered mortgages were more costly for subprime borrowers than those loans originated via direct channels. The responses were similar to the below, from a broker we’ll not name:
How very irresponsible to post the “brokered b&c loans more costly” from such a biased and ill-informed group as these jerks, who are obviously being funded by the mortgage bankers lobby. They don’t know the first thing about yield spread premiums and how they affect the consumer – if it wasn’t for this form of payment we’d (brokers with good solid reputations and records) make NOTHING, and go out of business, while the consumers would have all of about 5 lenders nationwide to choose from for their loan. …The ROOT of this mess are the wall street brokers that offered the lenders tantalizing rates for less than perfect paper they sold worldwide as A loans. The lenders in turn offered the brokers these ‘deals’, and instead of saying no to customers, we said ‘of course mr. consumer…we have a loan for you’ and then we sent it off to wells fargo or WAMU or countrywide who allowed us to make up to 7 points.
If you’re one of the really good brokers out there, you should be cringing right now after reading that. We almost don’t know what to say. Suggesting that a CRL study was bankrolled by the MBA? Really? Really really? (For any brokers reading this that don’t understand, the CRL and MBA have been at each others’ throats for years now.) Let’s remind everyone that in life — as in the mortgage industry — there are three kinds of people:
- Good
- Bad
- Incompetent
Few things these days tick off brokers more certainly than an insinuation that their chosen profession might have had something to do with where we are now. Which is comical, really — especially given that many are still publicly giving out instructions on “workarounds” for existing loan guidelines. Think of the mortgage mess like the process of building a swimming pool: investors located the land, lenders dug the hole, brokers and loan officers filled it with water, and borrowers jumped right on in after paying their entry fee to Wall Street. Everybody’s been the greater fool, in the end. Everybody. And seeing brokers, now, feel the need to protect their role by arguing that it was those nefarious, greedy lenders who gave them the loose guidelines that they simply and blindly followed demeans the entire point of being a broker. It cheapens the profession itself, although far too many brokers don’t yet seem to understand that. Keep it up long enough, and brokers will end up fighting the same stigma that now faces realtors. There are some great brokers out there, to be sure. And brokering loans is a vital function. But arguing for the relevance of the broker should start from an understanding of what it is that a broker really does for their clients. And that is decidedly NOT playing the role of order taker.
