PMI Mortgage Insurance issued a statement on their website that states they will no longer “insure or contract underwrite Third Party Originations” effective February 20th, 2009. So what does that mean? Well, that means they will no longer insure or contract underwrite for Mortgage brokers but will for Banks.
Business is already tough enough and now it appears the Banking Industry is trying to push Mortgage Brokers out of business. “The NAMB chief believes the nation’s largest commercial banks are part of a “well orchestrated campaign” to put brokers out of business and gain market share (National Mortgage News).”
Our Government is taking our Tax money and giving it to the banks in hopes they will start lending money but with no worries about bad debt since the Government is buying it, they are using that money and buying out their competitors and capturing market share. They are tightening lending guidelines and only lending to those with immaculate credit. Banks are becoming stronger, not weaker! When this mess is all over, Bank of America and a few others will have major market share which is bad for customers.
Without healthy competition, rates, prices and fees will increase!
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Tony,
This has been an ongoing battle for quite some time. I think it would hurt the mortgage lending business more so than what we are currently experiencing, but it looks like this is coming to be a much greater possibility than mortgage brokers thought.
Many mortgage brokers saw the writing on the wall, and decided to plunge into the mortgage banking side many months ago. I’m glad our office did this (banking side) a year ago.
My short answer to your question is: Yes. But there are a lot of folks out there who are correspondents who think that they are safe. I believe that they are the next to be put in the crosshairs.
Spoke to a rep from PMI today. They have cut brokers out and are continuing to do business with “a few” of their “better” correspondents. But it’s a case by case basis on the correspondents and she has been on the phone all day letting a number of correspondents that she has worked with for 16 years know that their relationship has been terminated.
And if the MI companies don’t get to the correspondents first, just give Fannie time. They started posting TPO stats on their newly issued mortgage backed securities 18 months ago and the rumor is that they are going to eventually put a LLPA on TPO (third party originated) loans.
Many of the correspondents that I have talked to believe that they would not be impacted if this LLPA goes through. I believe that they are wrong.
PMI is defining non-TPO as: the same company must originate, process, and fund the loan. That includes correspondents but not brokers. Fannie Mae takes that a step further. The same company must originate, process, fund, and SELL the loan directly to Fannie. So if you are selling the loan through a correspondent channel to Wells, Chase, etc, you are a TPO in Fannie’s eyes. If Fannie does this, I believe it will eliminate not only wholesale, but the correspondent channel as well.
Yes we have seen this grow more lately. I need everyone’s help My mortgage borker/partner just closed shop. I need to know if anyone knows of someone in the Tampa Bay area looking to add a forwad thinking with ten years experince. Had at one time a netbranch with 10 Lo’s before this downward turn. I am bound and detirmined to turn this around for my family (wife and 2.5 baby girl) Please feel free to contact myself either email at will@tampabayloanofficer.com or phone at 727.547.8930 Thanks to all and lets turn around this and make our industry better then ever before. Will Merritt
I have said the real estate as we know has and is changing!! You all need to do things different the radio show I did for wn radio has some great insight.
I would like Tony to work with me giving you all another place to market your real estate. wannanetwork.com and iwannatrade.com make a complete union that can do good for the network here and show the industry better ways. Show the banks you are willing to make the changes to grow and not make the same mistakes over and over. The banks are having trouble! No one wants to say yes or no. They are scared.