Tuesday, July 21, 2009

Woe to the mortgage bankers

Just had a very interesting conversation with an old friend - a mortgage banker.

I think he's going to quit his job.

He talked to his other friends at other big banks, like BofA. His other mortgage broker friends are considering quiting too.

I asked him why - he says: "no business".

He complains that the underwriting standards and product guidelines keep changing. Getting someone approved is a multi-month ordeal - maybe five months in duration.

By the time they're ready to close the underwriting guidelines have changed too much.

My suspicion is that the underwriting criteria are much more conservative.

The mortgage brokers that grew up during easy money have far fewer clients to sell mortgages to.

I asked about other real estate opportunities. The perspective was equally negative.

Many mortgage brokers diversified into real estate ownership. He says short buying is too difficult to finance right now.

I'm quite amazed how things turned upside down.

Regards, makingourway

1 comment:

Jerry said...

This is sobering... I have heard about how the changing market has started to lead people to all kinds of professional changes, and I hadn't even considered this one. Hopefully there are other career options for someone with his experience and skills (insurance, for example) in the current economy. It really is turned upside down, you're right.