April 8, 2009

Banks cut off mortgage brokers

By Marcie Geffner - Bankrate.com

A war has broken out between lenders and mortgage brokers, two groups that used to play nicely together so they could make loans for people who wanted to buy a home or refinance an existing mortgage. The fallout from the battle could result in fewer choices of loan products and higher loan fees for borrowers -- or at least that's the argument of the brokers, who so far appear to be on the losing side.

Brokers still control a very large share of mortgage applications; however, a number of lenders, most notably JPMorgan Chase and Citi, recently announced they will no longer accept loan applications that are submitted through brokers. Instead, these lenders have decided to take applications and fund loans only through their own retail and other in-house operations. As a result, brokers have found themselves out in the cold.

Read on: http://www.bankrate.com/finance/mortgages/banks-cut-off-mortgage-brokers-1.aspx