With all the stuff in the news this year about the mortgage industry and subprime loans it is no wonder why the mortgage and housing markets have come to a screeching halt. If I were looking to purchase a house in today’s market, I would be nervous too. Who can you trust?

I hear it every day. Mortgage brokers are the worst of all the mortgage professionals to deal with. Why is that? Well, in my opinion it’s because mortgage brokers are the most independent and have the most flexibility in how we conduct our business and with whom we conduct it.

Mortgage brokers are also the newest player in the game of housing finance and real estate. Mortgage bankers, lenders, Banks, Savings Banks etc. have all been around a long time. They are deeply entrenched in the mortgage and real estate industries. Mortgage brokers have only been on the scene since the 1980’s. Isn’t that what we do as human being: pick on the new guy?

The slant in the media is that mortgage brokers are responsible for writing no doc loans, stated income loans, and ARM loans for borrowers who had no business getting these loans all for the benefit of the mortgage broker. And to boot, mortgage brokers don’t explain these loans to their customers. I say bull. It’s not just mortgage brokers, mortgage lenders and banks can write and do write these loans, but like I just explained, mortgage brokers are the easiest fruit to pick on in the mortgage finance world.

I recently was forwarded an article from the Wall Street Journal that showed the large mortgage companies in the US who have closed, gone bankrupt, or sold since January of 2007. The report listed 100 companies. Although I have been paying attention, I was amazed at how many mortgage lenders were on the list that I have done business with over the 12 years that I have been in the business. To date, as a mortgage broker, I have originated nearly 1000 loans in my career and I have not heard of any of my customers defaulting on their mortgages. And when I take into consideration my company’s loans, we haven’t been notified of any foreclosure or defaulted loans thus far.


I have to sit back and think for a moment. Am I that good; am I that lucky? I don’t think so. What I do know is that I attend training classes taught by the National Association of Mortgage Brokers and the Arizona Association of Mortgage Brokers and have been trained on how to use these specialty loans when they are needed. These loans have a purpose and that purpose isn’t: so that I can make as much money as possible and put people in harm’s way. Rather, I have been trained to write these loans when it is appropriate to write these loans and turn them down when they aren’t appropriate. For example, it’s not appropriate to state income for a W-2 wage earner teacher a salary level that’s enough to cover the payment on a house that they want to purchase when I know their salary is really not that high. I can write these loans based on the credit of the consumer, but my ethics and integrity say don’t do it.

What’s funny is that mortgage brokers are the only mortgage professional in the industry that has to disclose everything that we financially earn in a mortgage transaction. All mortgage people make money on the interest rates we charge. Yet, only mortgage brokers have to show this figure to the consumer. Mortgage lenders, mortgage bankers, and banks don’t have to disclose this to the consumer. Who looks better? The mortgage banker/lender/banker. We both make the same amount of money by selling the same types of loans, yet mortgage brokers are getting hammered as being the bad guy.

I recently heard some information from the Arizona Department of Financial Institutions that complaints to their office regarding mortgage companies are 2 to 1 in favor of mortgage bankers versus mortgage brokers. There are more mortgage banker complaints than there are mortgage brokers, at least in Arizona. “Huh?”, I say, yet mortgage brokers get the bad press. Guess the good ole’ boy network still works even though the good ole’ boys are getting shut down.

Enough is enough. Isn’t it time you give us a shot at helping you. For more information on mortgage brokers go to: www.namb.org (National Association of Mortgage Brokers).


Tags: mortgage broker, s market, screeching halt, wall street journal, paying attention, mortgage lenders, mortgage companies, mortgage brokers, mortgage industry, mortgage professionals, mortgage bankers, subprime loans, slant, arm loans, mortgage finance, real estate mortgage, finance world, income loans