Now that Bank of America is exiting the wholesale mortgage business, will mortgage broker jobs go the way of jobs in prop trading?
Maybe. The pool of players is certainly shrinking in a big way. Even before BofA's announcement, the number of firms in the wholesale business had been cut in half. Consolidation eliminated some lenders, such as Countrywide, which merged with none other than BofA.
David Olson, president of Access Mortgage Research and Consulting, says you can blame new regulations that have made the mortgage game too tough to play. They seem to be anything but clear, he says. They seem to change daily. A question posed by one broker to different units within the Department of Housing and Urban Development could, on any given day, produce a host of different answers.
And, hiring a mortgage broker is a costly proposition. They require weeks of training, including passing SAFE Act requirements.
But don't write the obituary on the mortgage business just yet. Banks like Wells Fargo, which will now become the top wholesaler, are growing. Jobs may shift to the retail side. Growth may come from mid-size and foreign banks. Those to keep an eye on include U.S. Bank and MetLife, Canadian banks such as TD and RBC, and Japan's Union Bank.
Still, BofA represented a big part of the wholesale business. Its exit is a bad omen for burgeoning wholesale mortgage brokers.