Banks Bypassing Mortgage Brokers
January 31 2009 - MORTGAGE brokers have long served as an important loan source. Compared with the loan officer at a local bank, brokers typically offer a wider range of mortgage products from a variety of lending institutions.
But now some brokers are concerned that they might become marginalized, as some of the nation’s largest lenders move to block them from offering their loans.
The banks argue that the action reflects a move toward more conservative business practices, but brokers complain that they are being made scapegoats for the credit crisis, and that consumers will suffer as a result.
“Borrowers are going to have fewer choices because the industry is removing the element of competition,” said Richard Biondi, the president of the New York Association of Mortgage Brokers. “Banks are one by one knocking us out of the box.”
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