Banks rethink relationships with mortgage brokers

Industry that flourished after the S&Ls collapsed could find its role reduced after lending correction...

Brent King, senior vice president in the mortgage division of Wachovia, said while his firm works with and values brokers, loans touched by brokers historically go into default more often than retail loans. The reason may be fraud, he said.

"The more hands that touch the file, the greater opportunity for fraud," King said.

But the difference is small enough to warrant a continued relationship with brokers, he said.