https://www.spartacus.schoolnet.co.uk/USAwallst.jpg
Mortgagebroker 2009
Ouch!
I don’t think mortgage brokers are going to survive this downturn (Sorry MortgageBroker 
).
75% falls in volumes and 50% cuts in margin, revenues must be down nearly 90%. 
I just can’t see how the industry is going to survive without a drastic over haul of their business model.
As it appears that commissions were paid over three years (which is now being changed to five years at half the amount by a lot of banks), the bigger mortgage brokers may be able to cut back and live off the previous income stream for a year or so, but it will just delay the problem as they will have declining revenue with little new business coming in to offset the decline.
So yeah, a drastic change in business model indeed. My best guess on what to do would be to charge fees up front, but offer the commission back as a discount. Zero sum for the punter, but MB gets the cash flow earlier.
Expect no sanction from the competition authority for this blatant pricing cartel, still a complaint should be made and compensation explicitly sought .
Anyone in the mortgage broking business, should wrap it up and get out while theyre on top. Its game over. Theyll be lucky if they do enough business to pay their overheads, over the next 5 years.
Theyve had a good innings over the last decade, hopefully they’ve saved their cash and prepared for the recession, like all sensible people have.
Bordering on potential decimation of an industry given the double whammy of credit crunch and falling volumes. I truly wonder how many brokers made contingencies for this type of outcome? 
Make Hay etc…
Ever hear of the Hay Methodology evaluation, hey, HAY! That’s only making sense now… 
Jesus, this is absolutely brutal.
It’s happening again…
‘My trade I was a MORTGAGE BROKER, lost out to redundancy
Like my house that fell to progress my trade’s a memory’
It’s a pity it is not the parasitical estate agent class up for the chop. Between them they were creaming off 7-10 K from the average house sale chain
Our own MortgageBroker is a pioneer.
How? The only way for the brokerage business to survive now is to accelerate the bust as much as it possibly can. MB has seen the light first, I’m sure the rest of them though will bleat the usual message without realising the noose they’re making for themselves.
But I don’t think this is game over for the industry. The fittest and leanest will survive off current revenue streams for 3-5 years. By that stage, retail banking will have a very different facade.
Today the banks are trying to transfer their job losses to the brokerage community, but at some stage the banks will cut jobs themselves, alot of jobs I suspect. Once they go into hatchet mode, the constant cost of keeping sales/processing staff versus the variable/volatile stream of new mortgage business will become obvious and they’ll look to cut the constant cost… cue more job losses and a return to no-foal-no-fee business generation.
The banks will probably then rue the day they decimated the broker network in 2008.
They are mortgage brokers too. 
Another falling revenue stream just like fees and advertising. It seems only the valuations business is growing.
Can’t see how the brokerage business can survive in this climate. Start selling/upgrading Life Insurance etc. maybe an avenue worth exploring, given their customer base.
Those in construction
Mortgage brokers
estate Agents.
All three professions will be heavily affected by the reduction in construction and in market activity.
I wonder also are people in these industry’s over represented in BTL.
Having been caught up in the bubble and having seen their peers make fortunes I believe that many of the VI’s were not knowing enticers of others into making rash investments but were true believers who bought into the whole BTL levereged investment capital appreciation scam themselves.
Faced with a reduction in their primary income combined with simultaneous pressure on their BTL properties will mean tough times for anyone who is over extended.
If you run a business where other people have complete control over how much you charge for your service, and how you charge it, and they can drastically cut what they pay you when they feel like it, the you’re on a hiding to nothing from the start.
-Rd
Quite. I happen to know that a certain big bank (cough OP cough) has scrapped their IT grad intake this year, i.e. loads of youngsters who believed they had just landed that ‘great start’ have been told “Sorry, you won’t have a job after all”.
Not sure if this applies across other parts of their grad program though.
I wouldn’t like to be a new grad in this environment. Watch out for stealth job-cutting like ‘no new grads’ and ‘hiring freeze’ across the sector.
It is my undersanding that there is complete budget and headcount freeze in the major banks. This includes any IT.
I think the banks are making a mistake.
If I want a mortgage I will NOT apply seperately to 20 different banks. Banks are notoriously tardy at customer relations. The set up barriers to dealing withthemselves with one hand and encourage you to give them a call with the other.
I will still be using the services of a mortgage broker and if two banks have similar products but only one bank is represented by the mortgage broker I will not be getting the mortgage from the bank who isn’t represented.
At a time when banks are scrambling for business (high class) they are shooting themselves in the foot.
They are saving themselves the cost of making staff redundant but the staff will be made redundant later when they lose out on the few mortgages that do sell. This is short term thinking at it’s worst.
If I was in control I’d get rid of all my mortgage selling staff and pass the job over to mortgagebrokers. I would reduce commission too though.
Any business broking mortgages only will feel the pinch pretty badly but if you broker life & pension business as well your focus will shift to those obviously.
In terms of employment opportunities it is quite easy for someone from a Life/ Pensions background to switch to broking mortgages but not very easy at all coming the other way as there is a little bit more work involved.
don’t write me off yet folks!
to the contrary i think brokerage will actually advance faster than we have in the last 5 years, note: advance does not imply ‘grow’ nor does it mean there will not be lives destroyed, getting sawn in half is hard to stomach for anybody, i am a case in point, my livelihood is under threat but down doesn’t mean out.
for the first time since 2000 banks are actually asking guys like me what i think about ideas for the market, on the way up there was no innovation, the last time there was some originality in the market was when BOS brought in trackers (they too put me over a barrell recently, cheers, i’m still stinging from that one!).
brokerage will move to fees but having said that we are also going to move into broker ideas which were ignored for years.
Tracker loans will likely be based on the Euribor from now on. (that is if they come back) and it won’t be too bad because Euribor will not be mental forever, and when they do broker will have the ability to cut the cost to 0% and instead take a fee, imagine that? a loan with only ‘lenders risk margin’ attached? it will make NIB’s old offer seem expensive and by right we’ll earn our fee.
‘loyalty mortgages’ were laughed at when i mentioned them a few years ago, as was broker banks, all of these things might become real now, conflict brings out the best (and the worst unfortunately) in ideas.
I have faith in our business model (which to be fair is unique in the irish market) and i’ll be damned if i’m gonna let any bank put me out on the street!
– just have to figure out how to get through 2008/2009 in the meantime!
are these professions…???
Eh, doesn’t that make them variable rate loans? I thought trackers by definition tracked the central bank rate?