Competition and How it Affects the Milwaukee Mortgage Market
Posted by Douglas Lenski on Wed, Aug 31, 2011 @ 10:46 AM
Bank of America is exiting the correspondent mortgage business. They had previously exiting the broker channel twice in the 5 years. Exiting the correspondent side will increase borrowing costs to homeowners.
Bank of America was the largest purchaser of loans originated by third parties in the country. The reason they purchased Countrywide in the first place was to obtain Countrywide"s correspondent business and third party origination platform. They also obtained Countrywide's foot print that had been created in most major markets for retail. BoA exiting means all of those loan origination's must go to other lenders. The problem is the lenders borrowing costs are higher. BoA offered the best pricing to their correspodents and that was passed to the consumer.
It was a very sad day when my companies lost the ability to work with BoA directly as a broker. We were able to find lenders that sold to BoA and were able to obtain similar pricing. This is another big blow to the chaotic mortgage industry. Milwaukee mortgage rates will be on average higher because of this enormous channel being lost and the lack of serious competition.
