jamie dimon remark sparks mortgage broker outrage

michaelblomquist at 13:45 2009-03-13 said:

Chase was equally as unsafe and unsound as the worst of them. Liar loans to wage earners...NEVER EVER EVER a more reckless, criminal, treasonous and foolish lending guideline/product, exception for liar loan, Option ARM to wage earner.

http://www.michaelblomquist.com/images/Zippy.pdf Finally the NAMB is waking up! Permalink

catherine at 13:53 2009-03-13 said:

brokers please wake-up, this guy is screwing you to the wall for his company's mistakes. He just told the world that the losses in this market were all the broker's fault.

He doesn't take credit for writing the rules, approving the loans and funding them AND MAKING TONS OF PROFIT ON THEM

he wants a scapegoat and BROKERS ARE IT.

now are you going to give him anymore of your time or just let your mouthpieces talk bad to him

this is the kind of crap that makes your skin crawl when you write a loan and he makes the profit, isn't it?

this is the start of every man for himself! Permalink

mortgagemess at 21:02 2009-03-13 said:

Please, brokers what did you expect? After seeing over 300 companies close down or eliminate broker relationships, you should know your days are number for most and for others that survive be ready to just make a living out of it. The days of money pouring in are gone and won't be back for a long time...the banks are ALL out to get rid of you and the few you have left to work with will soon cut you off...

If its banks vs. brokers.. the Harvard Mafia of bankers always wins... Permalink

NonproducerAE at 22:59 2009-03-13 said:

Standard response from NAMB. Brokers are the greatest thing since sliced bread and it is always somebody else's fault. NAMB has always been, and continues to be, interested in only two things - retaining YSP and as little disclosure as possible. Permalink

SteveP at 01:22 2009-03-14 said:

NAMB president Marc Savitt responded in kind, saying, “It is disappointing to once again refute senseless attacks on the mortgage brokerage industry based on misinformation. Mr. Dimon’s comments clearly reflect his poor understanding of the mortgage industry and the role of the mortgage broker.”

Marc Savitt says Jamie Dimon's comments was based on misinformation? What a joke! If Marc Savit somehow has better loss data for Chase's various business channels than Chase's own CEO, he needs to present his more accurate data, or he needs to shut up!

If Marc Savitt had any class and integrity at all he would have instead responded by saying "Jamie Dimon's comments further confirms the urgency for the mortgage broker industry to clean up its act and as President of the NAMB, I am committed to leading this initiative." Instead this moron responded by blaiming the loan programs and AUS offerd by Chase yet Savitt failed to explain WHY THESE VERY SAME LOAN PROGRAMS AND AUS SYSTEMS DID NOT PRODUCE SUCH LOSSES FOR NON BROKERED ORIGINATIONS!

If the president of the NAMB is in denial, what does that say about the rank and file members of the NAMB? Permalink

michaelblomquist at 01:29 2009-03-14 said:

Anyone in the business knows that retail was just as bad if not worse than wholesale.

The point is that the LENDERS were the ones in charge of the lending guidelines. As lending guidelines eroded it was either go stated or not compete. Competition was rarely based on pricing, but who could do the most ridiculous and fraudulent financing with the least amount of financing.

Prior to exiting the business in 2004 when guidelines were becoming more reckless it was very common for wholesale to kick out loans and then have retail approve the same loan that was packaged in the same fashion.

What we are watching is the destruction of the mortgage broker and the FTC should be stepping up. Yes, the NAMB should have done something as well and it may be too late. Permalink

michaelblomquist at 04:40 2009-03-14 said:

Retaining YSP? YSP is a huge benefit to consumers if it is used to credit for closing costs. Many borrowers don\'t have equity or cash to pay for closing costs and are thus limited to 0 cost loans which involve YSP.

Per NAMB\'s limited disclosure the banks do NOT have to disclose YSP paid to their employees, but brokers do.

This is unjust, unfair and anti-competitive.

I don\'t understand your post. Permalink

Georgetown at 04:44 2009-03-14 said:

Dimon may have told a half truth ignoring the role of the underwriter and investor but what about those brokers, and you know there were more than a few, who knowingly commited fraud?

Right or wrong Dimon is reflecting the sentiment of the funding conduits and without them it will be increasingly difficult to continue to originate brokered loans. Permalink

SteveP at 07:59 2009-03-14 said:

Michael, for many, many years retail loans have performed far, far better than brokered loans so I'm not sure where you are getting your information, but wherever it is, it's not reliable. I have yet to see a single MI company or GSE tighten up specifically on retail originations where as many have eliminated TPO's all together.

As for the YSP issue, a broker earns his or her YSP at closing and under RESPA it has to be fully disclosed to the consumer. Moreover a broker, earns the disclosed YSP even if the lender does not have adequate pipeline coverage in a rising rate environment.

As for direct lenders, they do not earn a YSP before or at closing. Instead, direct lenders, depending on the success of their hedging strategies, may or may not earn a gain on sale and if one is earned, it is earned days or even weeks after closing. It is impossible for a retail lender to disclose their gain on sale at closing as they do not even know if they will earn a gain nor do they know exactly what that gain would be.

Direct lenders generally fill multi-million dollar commitments that they take down based on the size of their total pipeline. They do not know at closing for any particular loan which commitment the loan will be delivered under. Wholesale lenders also take down mandatory commitments as well and similarly, wholesale lenders do not know which brokered originations will go into one commitment or the other but they do know how much YSP was paid on any particular loan even if they do not know what their eventual gain on sale will be. Permalink