Big Banks or Mortgage Brokers, that is the question?

The big banks have been trying for years to take over the mortgage industry. Why you ask? Because they see how much money they can make off of the unassuming consumer. Today, the majority of mortgage loans are still originated by mortgage brokers, approximately 60% and the banks aren't happy about that. The banks have lobbyists in Washington backed by tons of capital, mainly our deposit money. They are trying very hard to oust the mortgage brokers and take a larger share of the profits. They go on the media via TV and radio bashing the mortgage brokers for all the bad loans out there and the whole mess financially our economy is in. The funny thing is, however, is that the mortgage brokers are not the ones who underwrite the loans. The broker is just the originator and then sends the file into the "Bank" who underwrites it and then approves it. So how can mortgage brokers be to blame? Good question! The more the banks can verbally bash the mortgage broker, the easier it will be to finally do away with them. Consumers in general believe that going directly to their bank cuts out the middleman. In a way that is true, however, banks have enormous overhead, like payroll,health insurance, worker's compensation, bonuses, vacation, etc to cover, so if you think that the rate or fees aren't increased due to all that, you are surely mistaken.

Last time I checked, America was a free country and people could make their own decisions. These big banks are trying to socialize the mortgage industry. Imagine a world where the only loans that consumers can get are from the big banks. Their loan officers are typically not licensed by the Department of Real Estate, they typically don't have years of experience and are responsible for opening checking and savings accounts as well. The banks are already overwhelmed with the 40% of the marketshare they already have. Add more business to that and guess what? Service levels will go down, interest rates will go up and free enterprise has just been eliminated. You should have the right to choose for yourself which way to go. Yes, there were bad mortgage brokers out there that did bad things, but I also know that there are some bad bankers that did the same bad things. All in the name of money. Now that the mortgage industry as a whole has been under such scrutiny, the major of the bad ones are gone. Thank God!!!

Don't let the big banks try and take over the industry, nothing good can happen from it. Protect your rights as a consumer to shop for the best deal. Mortgage brokers have the ability to shop the best loans available for you. Remember, it is your choice whether to go directly to a bank or directly to a mortgage broker, but it should be your choice not by banker's force! For more information, please call Jeff Eisenberg at 661.964.2600 x104 Southern Oaks Mortgage, Inc. - When the Right Loan Matters! www.somloans.com, www.loanmanjeff.com or email me at jeff@somloans.com