April 24th, 2015 3:12 PM by Richard T. Cirelli
Mortgage Brokers: Best Source for Mortgage Loans
In my last newsletter I wrote
about the dramatic increase in loan originations by Non-Banks vs. Banks. Now, there are new statistics
out attesting to a large increase in Mortgage Broker originations too.
the trade publication Inside Mortgage
Trends, brokers played an increasingly important role in the conventional
conforming market during the first quarter of 2015. The publication performs an
analysis of mortgage-backed securities issued by Fannie Mae and Freddie Mac. It
does not include Jumbo loans but I would assume that mortgage brokers played an
even larger part in originating Jumbo loans.
brokers were responsible for $23.8 billion of single-family mortgages
securitized by the two government-sponsored enterprises (Fannie Mae &
Freddie Mac) during the first three months of this year. That was up 16% from
the fourth quarter, the biggest gain among the three production channels.
raised the broker share of Fannie Mae/Freddie Mac business to 12.6%, the
highest it’s been since 2009. The broker share of Fannie/Freddie activity has
been slowly growing since hitting a low of 9.9 percent back in the third
quarter of 2013.
Why Mortgage Brokers are Gaining Market
The trend in mortgage broker
originated loans can be explained by many of the same reasons Non-Banks now
dominate the mortgage market:
Brokers loans are locally processed whereby the originator and processor live
and work in the same community as the borrower. Therefore, Customer Service is
tantamount to their success
Brokers are required to go through a rigid licensing process that includes
educational courses, testing and background checks. Bank originators are
Brokers, in general, have more experience than bank originators due to the
necessity of having to be responsible for all aspects of the business. They
must develop their own sources of obtaining loans and be responsible for
compliance, lender guidelines, and may other facets of the industry.
Brokers have access to more lending resources than banks – more lenders, more
programs, and more options. If a loan can’t be approved with one source, they
can try others.
Brokers receive wholesale pricing. In almost all cases, rates and/or costs are
Just In: Study Says Realtors Prefer Mortgage Brokers to Banks:
A study just
released shows that Realtors prefer mortgage brokers over banks. The study from
Inman News said mortgage brokers were the preferred choice (47%),
banks (31%) and non-bank lenders (22%). Over 77% of Realtors use just one
lending source. The items listed as most important to them, in order of preference,
were speed, responsiveness, cultural fit and breadth of products. Another great
takeaway was that 68% of Realtors do not feel comfortable with referring or
recommending clients to online lenders.
The momentum has definitely
shifted back to the mortgage brokers and non-banks because we have the
expertise and resources to get more deals done, and with local service. Let me
know how I can help you.