- Little did I know when I started this blog that the lending industry would collapse the way it has! Angelo Mizillo, Countrywide's founder, prophesied that when the dust settled there would be five big banks innd business. That was probably 1 1/2 years ago and the major banks left are Chase, Wells, and BoA. Have you noticed deals are getting scarcer and more difficult to get down?
Let's look at this alarming trend: - Chase, Wells and BofA all received huge TARP funding. Have you noticed the major Warehouse line players have gone away? Here is what I see:
- Mortgage brokers have disappeared by 60-70%
- Mortgage Insurers are not writing business
- Brokers cannot order their own appraisals any longer
- Great pressure for Brokers to disclose fees
- Simple files are seeing 50 closing conditions
- Wells Fargo has quadrupled their business
- Wells Fargo loves HVCC legislation
- Major Banks don't need Warehouse lines
I met with a Wells production manager who told me a Wells retail rep would have to fund $3mm to earn $10,000. Most brokers would be earning $30,000. Retail reps are doing call reports, calling on realtors all with no salary. Borrowers are nervous about the broker community, brokers are nervous about the uncertainty of lender control and appraisals. If Wells, BoA pay reps $300, it gives them the ability to beat out the competition on price, pricing brokers out of business.
Care to comment?
