JP Morgan Chase Maligns Mortgage Broker Quality
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JP Morgan Chase recently left the wholesale side of the mortgage lending arena citing the poor quality of mortgages coming from mortgage brokers as part of the reason. JP Morgan Chase has always been one of the largest mortgage wholesalers until now.
JP Morgan Chase Ugly Wholesale Exit
JP Morgan Chase has decided to let their retail branch banking operation originate all the loans for the company which a spokesperson implied had a lesser default rate.
This statement was challenged by the National Association of Mortgage Brokers President, Marc Savitt, who said in American Banker,
“Chase has told me that in person too – that their retail delinquency rates are lower,” he said. “But brokers do not approve loans. Brokers do not underwrite loans. Those decisions are made by the underwriter. That would be Chase.”
Further heating up the tension over Chase’s unsubstantiated poor quality claims, Mr. Savitt said in the same interview,
“Chase just dissolved a partnership. We are going to go out there and compete against them using other relationships. We will be using the products of others to go against their products.”
Mega-banks have been unfairly maligning mortgage brokers in slight ways like this back-handed comment by Chase. And in rather big ways too…by laying the whole cause of the subprime crisis at the door of mortgage brokers.
Banks have clearly been point their accusatory finger at brokers for a very long time, so kudos to you Mr. Savitt for finally having the cajones to say something to JP Morgan Chase for passing this propaganda off as fact. In case you didn’t notice, the mega-banks don’t like mortgage brokers and are going after your very right to exist. It’s about time you said something. Keep it up!
Good Luck!
Author: The Mortgage Insider
Date: January 14, 2009
Tags by Post Mortgage Brokers, NAMB, National Association of Mortgage Brokers
Technorati Mortgage Brokers, NAMB, National Association of Mortgage Brokers
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It’s kind of like the big retailers i.e., “Walmart” squeezing out the Ma and Pa businesses.
I personally think that Chase just wants less competition. Also, if I’m not mistaken “Bankers” don’t have to disclose “YSP”.
As an ex-loan officer myself I’m all about encouraging clients to consider taking their loan business elsewhere, to brokers, to increase competition and humble the big boys. As a Realtor I typically get much better service from the L.O. that works for a Broker than a Banker.
As far as a higher default rate amongst brokers, I think it’s very convenient for Chase to offer that up. Are the big banks “QC” and Underwriting departments not being all they can be?
Oh…yea…you nailed it!