The Bank of America announced on October 29th that it will stop using loan brokers to originate home loans starting the first of 2008. It is expected that some other large banks may follow suit in coming months.Â
B of A stated that this move will allow it to expand its retail lending channels including its own banking centers and loan officers. Mortgage brokers have historically been involved in about 25% or the loans that the B of A originates.
Some other large banks including Washington Mutual and Wells Fargo have recently moved to rely less on mortgage brokers in order to have more control over loan quality.
What this movement may mean to residential borrowers is that they will need to spend more time talking to multiple lenders rather than relying on loan brokers to search out the best options for them. Investors should watch these changes to be more aware of where to concentrate their efforts in finding financing for their investments.
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