Are you working with a mortgage “broker” or “banker”?
I am not a hater of your common mortgage broker, in fact I think Brokers have delivered fantastic rates and services in the past to certain markets. Small business makes America great, and mortgage brokers are typically small local businesses. Mortgage brokers have been writing a majority of the home loans in America for some time, but trouble is on the horizon…
Chase announced this week that Wholesale lending (for brokers) is being shut down. Retail and correspondent lending is still alive at Chase however, and I think this offers us a unique glimpse into what is coming. (retail is Chase lending you the money directly / correspondent is for mortgage bankers)
With extreme volume right now because of refinances, lenders are having issues funding the loans they have fast enough and managing huge pipelines. Often they lock in millions of dollars in profitable loans, only to see rates improve 2 days later and those clients go somewhere else before the loans close and fund.
If lenders have issues, who are they going to allow those issues to effect first, their loan officers or the thousands of brokers that use them to fund their loans? Obviously brokers are the most vulnerable in a volatile market because they have zero control or ability to fund loans. They don’t have their own funds and therefore aren’t on the hook for them.
Mortgage Bankers are the mid-size lenders that fund their own loans and then sell the loans afterwards. There companies are typically larger than brokers and control the processing, underwriting and funding of your loan. These companies share more of the risk and therefore are more profitable to the giant lenders like Chase.
I believe mortgage banking represents the best of both worlds. You get the personal touch and flexibility of the broker, and the security and service of a large bank. That is why I have always works for a mortgage banker like Myers Park Mortgage.
If you would like to buy a home or refinance, please call Olan Carder directly at 980-721-7478. Rates are still low!!