What to Do with Displaced Mortgage Brokers

by Alex Stenback on November 29, 2007

Dance_for_business Theresa Boardman, of the always excellent St. Paul Real Estate Blog, muses on the fate and future employment prospects of the growing list of unemployed mortgage brokers in the Twin Cities. (2600 0f 4000 mortgage brokers did not renew their licenses this year):

[W]here will the 2600 local lenders who decided not to renew their licenses go? 

I have an idea.  Perhaps the over worked REO* departments at some of the local banks will add staff.  That would help the economy by providing jobs and by making it possible for the banks to actually sell the properties that they own instead of leaving them abandoned and vacant becasue there isn’t anyone at the bank who is actually available to return a phone call or make a decision.

On the one hand, this is a pretty good idea – put all these people to work in the loss mitigation and REO departments – they obviously need the manpower.  Supply meets demand and all that.

On the other, we can assume that a goodly portion of these these 2600 + brokers were the amateurs that flooded the market to make a quick buck, and also were inflating appraisals, dotting the "i’s in liar loans, and involved in the other sketchy behaviors that got us into this mess in the first place.

Though the idea of having those that made the mess help clean it up appeals to our sense of irony and poetic justice (in a "make the war criminals dig their own grave" sort of way) we’re not sure that this is who we want running Loss Mit/REO depts.  Especially if the standard is "actually available to return a phone call or make a decision" since these are THE specific skill sets that the crap brokers universally lack.   

To the Realtors out there: Do you really want those half-assed brokers (who would never give a straight answer, never return a phone call, and screw up your deals) on the sell side, where you HAVE to deal with them?  Didn’t think so.

{ 7 comments… read them below or add one }

Editor/Alex November 30, 2007 at 8:46 am

I’d also like to add that this is not a “hit piece” on brokers in general (just the crap ones) there are a lot of great ones out there.

One of THE major mischaracterizations that we’ve seen over and over again is that “Mortgage Brokers” are by defininition suspect. Not the case.

Todd Carpenter November 30, 2007 at 10:32 am

For the most part. I think the best place for the majority of the LO’s to fill jobs at, would be Dairy Queen.

Nate November 30, 2007 at 1:08 pm

I knew quite a few people who became mortgage brokers during this run-up and did quite well at it money-wise. What I found funny was when I went to buy a house, I didn’t choose to work with anyone i knew, but rather looked to find someone with experience and a trustworthy record. There are certainly good brokers. I’m sure there are also many who rode the gravy train as long as they could and now need to get some real skills.

J Sampson December 2, 2007 at 9:39 am

I DO think they should find employment in the loss mitigation departments- but as janitorial staff. They should be required to go into those homes that were lost because of their greed and incompetence and clean up the garbage, the graffiti, the animal droppings, the mold, etc. that have accumulated while vacant. They’d certainly show better. Or, they could get their RE license and take all the listing appointments for the sellers who are underwater and look them in the eye while they explain how a short sale works. When the redemption period after the sheriff’s sale is over, they can head back and help the former owners pack up their lives.

The party was fun while it lasted. The hosts should at least share in the hangover.

Teresa Boardman December 2, 2007 at 1:39 pm

Thanks for the link love. :) . . I am so frustrated with REO properties I would scream but no one can hear me on the internet. . . podcast hmmmm

KLP December 21, 2007 at 3:35 pm

Some of you people are as ignorant as most of the politicians I have heard over the last many months.

As a Mortgage Broker I was asked by Real Estate Agents to see what type of terms their 100% LTV (no money down) Buyer Clients could obtain.

I always laid out the options based on the GUIDELINES issued by the funding lenders.

The issues we face present day is that people who were not good at keeping up with their obligations such as car payments and even LATE ON $10 MIN credit card payment accounts were extended an opportunity to own a home.

Those same people did not change their bad habits when it comes to paying bills on time so their credit rating either stayed the same or even got worse !

I informed borrowers that their less than average credit rating allowed only a few options at 100% financing.

a 2/28, a 3/27 or a 30 year fixed all with OR WITHOUT a prepayment provision. Real estate agents OFTEN encouraged their Buyers to consider taking the LOWEST POSSIBLE payment terms which included an interest only option to boot.

Almost EVERY TIME the borrowers ELECTED the lowest possible payment. Why?? Cause that’s the way we Americans are. especially the younger we are. We want it ALL right now and will worry about the details tomorrow.

By the way MUCH of the money made available comes from the WHOLESALE SIDE of the Retail banks!

So do not insult me with your Bull Shit comments about “those greedy Brokers” when you don’t know what the _uck you are even talking about.

chris January 7, 2008 at 1:35 pm

hats of to KPL for having the intellegence to get it. brokers offered customers products that were provided to us. we are not to blame……

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