Before the Great Recession and housing market crash, mortgage brokers at their peak accounted for two-thirds of all mortgage originations in the United States. Yet, while mortgage brokers were serving their communities by closing more loans than banks, after the crash, the too-big-to-fail banks were bailed out with taxpayer dollars, while most of these mortgage brokers, small, independent community businesses, were forced to close.
However, for the past several years, mortgage brokers have been making a comeback. According to numerous articles published by industry periodicals such as Mortgage Professionals of America, National Mortgage News, American Banker, and the National Association of Mortgage Professionals, the number of friendly neighborhood mortgage brokers in the United States has been growing; and they’ve been clawing back their larger share of the originations pie! The ‘Big Box Banks’ have been losing market share to local professional loan originators employed by small, home-town mortgage brokers.
Why do you suppose borrowers are flocking away from the ‘Big Box Banks’ in favor of local professionals? There are numerous reasons:
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- The corporate cultures at these ‘Big Box Banks’ are still one of selling product (in this case, mortgage loans) rather than helping clients achieve their financial goals and housing dreams. Their loan officers tend to be unlicensed, with less training and education than many of this industry’s true financial professionals.
- Their boiler-room business models promote selling as many loans as possible, rather than getting to know the needs of their borrowers. And if you think ‘Your Bank’ truly cares about you, you’re sorely mistaken. Despite their advertisements, bank culture is not about the consumer; it’s about volume and profit. (One need only point to the numerous bank scandals in recent years where banks were fined and censured for creating fraudulent sales and accounts to unsuspecting consumers, simply in order to meet bank-imposed quotas.)
- For a loan officer to take a loan application without truly knowing the borrower is akin to a physician diagnosing without a patient interview, exam, or diagnostic tests. It’s financial malpractice, plain and simple.
- Since most banks and loan originators don’t build relationships with their customers, how can they possibly help you choose an appropriate financial product when they never take the time to get to know you, your financial concerns, and your financial goals?
Don’t entrust the biggest financial decision of your life
to some bank representative looking to sell you a mortgage!
By working with Mortgage Wealth Advisors,
we’ll ensure your mortgage complements your financial needs today,
while helping you attain your financial goals tomorrow.
Your transaction will go smoothly. Your loan will close.
And guess what? The rates and fees you’ll receive
are probably the same as if you went to ‘Your Bank.’
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
Nobody wants to work with a dirty mortgage broker and have their credit ran in the mud. Working with a Bank you get speed and efficiency and safety. Even if the rate is a quarter higher who would trust their biggest decision ever with a filthy mortgage broker. All you mortgage brokers are slowly going to be weeded out of the market again…. your margins are not big enough for you to survive. Join the tide or kick rocks… lol
Hi Shaun,
WOW. Where do i begin. I presume you had a poor experience working with a mortgage broker. Or maybe you work for a bank? Either way, statistics don’t support your statements. Nationwide, the facts show that when working with an independent local mortgage broker compared to working with one of the ‘Big Box’ banks, borrowers receive a superior experience, get better advice, save money, and obtain a faster closing.
I’ll admit there are bad apples in every industry – INCLUDING the banks. But the facts are clear; as a whole, borrowers do better when working with independent local mortgage brokers than working with banks.
As for your comments about margins, here too the facts do not support your claims. For the past several years, there have been numerous banks who have discontinued their mortgage operations because THEIR shrinking margins have made residential mortgages unprofitable. (Take Capital One for example. Even Bank of America has contemplated leaving the mortgage business!) Yet, the number of independent local mortgage broker companies has been growing. In fact, nationwide, more loan officers have been leaving the banks to go work for mortgage brokers than the other way around!