The effective of the global credit crisis has hit particularly hard on the financial sector and in particular with mortgage jobs. It has been estimated that as of September of 2008 we have lost a minimum of 65,400 jobs in the mortgage industry! While job numbers accross the nation have also declined, this number of jobs in the mortgage industry has hit many families very hard.
In previous articles we have addressed the underlying causes of the housing bubble and subsequent meltdown. We have seen how the blame flows from top to bottom in the mortgage industry. Our thoughts and prayers however, must go out to the over 65,000 workers and their families who have had to start over in a brand new career due to no fault of their own in most cases.
We believe the future of the mortgage industry is clouded, but we are hopeful that renewed interest in common sense loan making will allow upfront mortgage professionals to continue to prosper. This includes mortgage brokers. Many lenders have cut off mortgage brokers for various reasons. A growing concern in the marketplace is that mortgage brokers are about to be squeezed out of existence forever due to the efforts of the big banks who put pressure on the Government to support their positions. While it is true that far fewer lenders do business with the wholesale broker channel today then in years past, we believe that will a little ingenuity, a lot of customer service, a good work ethic, and a positive attitude… that the remaining warriors in this industry will not only prevail but will prosper when the market finally returns to normal.
There are many ways that the mortgage brokers of 2008 are surviving. Small and medium sized mortgage broker businesses have merged or sold out to larger ones. Another way they have survived is by consolidating with larger net branches of larger mortgage companies. Yet another way is for them to become virtual loan officers of federally chartered banks, allowing them to expand their market beyong the backdoor.
The advantages of becoming a virtual loan officer include:
- The ability to offer loans in other states
- The lack of overhead required to stay in business
- The use of a federally charterd bank branding
- The ability to offer FHA and other products they may not have otherwise had access to
- Not having to worry about compliance and payroll issues
Florida is perhaps the second fastest declining market in the country. The ability to become a virtual loan officer and offer products into other states in a great advantage to many brokers. Licensing is by far the biggest boon to a loan officer in Florida. While the broker may be giving up a small percentage of his commission he/she is gaining the ability to offer more products to more consumers while reducing the overhead and backend costs of their old business. In this way they can do more loans and make more money thereby surviving this incredible downturn in the market.
No doubt mortgage brokers will continue to survive and fill a valuable need for home owners in this country. We look forward to assisting as many motivated mortgage professionals as possible and together help each other come out the other end of this historic period in our history stronger than ever!