in the new mortgage world with focus on cost/commission reduction by banks how will mortgage brokers survive? Many offices opened in the good times but I cannot see where they will get revenue from in the future
mortgage brokers = parasites.
what service do they really offer…its easy to compare rates online
harsh words softly spoken…
Some people sadly don’t know how to use computers.
Insurance brokers still make a living eventho most firms have (or plan to) the same prices in the direct and broker channels.
No reason to see why Mortgage brokers won’t continue but maybe not as many in the future
parasites? jeez! tell us how you really feel?!
If you look at the reduction in the number of mortgage brokers in the market you’d understand that the industry is basically dead, no assistance or ‘good riddance’ chants required. However, the area of asset finance (i happen to specialise in mortgages) is not, and never was a totally simple or brokers never would have existed. Personally i think the industry will change more towards wider financial planning, something which is not taught in our schools and which many people are not well versed in. There are still loads of unexplored niche markets out there too.
on thing is for certain, there will be fewer of us and people who are leaving the industry are not jumping to other brokers, they are going into other fields entirely so I would be confident that a core group will remain, consolidate and come out the other side in decent shape.
@cockhead, good to see you earned your moniker. xo
I think citi is no longer accepting mortgages through brokers in the US.
One of the big issues from a risk perspective is that loans from brokers tend to have higher loss rates.
The advantages of brokers is that lenders can save on distribution costs. Aside from the current crash and unfortunately(for them) their future is completely at the mercy of lenders. A slight weakness in their business model
I hear that rationale a fair bit, the latest was from a bank here saying that broker originated loans had 3 times more bad debt than branch loans, but at the same time, brokers placed 4 loans for every 1 branch loan in the past in volume so while true, its also not statistically correct.
I don’t have stats for Ireland, but I’ve seen stats that confirm poorer origination quality in other countries (which I can’t share). I think one of the rating agencies increase the default probability for broker loans.
Although I’m not certain the WSJ article on citi pulling back from brokers cited poorer performance as one of the reasons.
the originate and sell model grew partly due to rapid distribution via brokers, the people packaging the loans were not brokers but banks and the ratings they were given were artificially high, the blame game needs victims, guess i’m part of the problem
Welcome to my world MortgageBroker
been in it for quite a while! how’s all with you? its fairly rough in finance!
I got my mortgage through a Broker, and would deffo do it again if i had to.
I had excelent advice and saved a considerable amount of money.
To answer the original question, no. Mortgage Brokers will go the way of travel agents. Essentially redundant.
yer officially f@#ked in here then! and the VI accusations will come next!
i beg to differ on that, because as mentioned earlier, it will require niche/diversification moves. thre are still travel agents, certainly not as many as their used to be, but they exist nonetheless and that’s what brokers will have to do.
Ah! Well. How you have changed. Self interest at its best. Well done! The bitterness indeed!
thats a load of bollox as well.
Most people still want somebody to hold thier hand
Trends would suggest otherwise.
Most owners just dont get it.
They know prices have fallen, but dont accept by how much.
So the properties just lie there.
The only time they may make a move is when they read about price falls in the paper.
Unfortunately newspapers print yesterdays news.
So, the owners are only catching up with the price curve - as opposed to being ahead of it.
Banks are another problem.
They simply arn’t giving out mortgages, and when they do, they value the property exceptionally low.
Buyers dont realise that mortgage approval is meaningless, its the loan offer that counts.
Banks give out the former, but balk at the latter.
So basicially, very little selling.