Seems like Mortgage Brokers are in for a rough ride ahead. They are now getting laid-off en masse, it will only get worse in coming year. There is now legislation via “The Homeownership Preservation and Protection Act” that will force regulation on the industry. One provision will create a fiduciary relationship to the borrower, in other words the Broker must act in the borrowers best interests. No more steering borrowers to high interest loans? YSP going away?
As origination volume and profitability plummet, the industry will see further significant contraction. Those left standing will not want to be in the business with all the new regulation that will very likely be imposed.
And you forgot about nuclear winter for the realtors, contractors, granite quarry workers, commissioned furniture salespeople, big screen TV salespeople, Hummer dealers, guys that like to light their cigars with extra hundred dollar bills they got laying around, and flip (this, that, whatever) house show producers and cameramen, etc. etc. etc.
A natural cycle, nothing to lose sleep over. The ones that behaved themselves during the boom and didn’t screw people will be standing on the other side of this and many of those have been through the ups and downs before. The ethical brokers have satisfied clients out there and when their freinds and relatives find they need that service or need help refinancing their 2/28 into a fixed, those satisfied unscrewed customers will refer them. More than just R/E and finance does the business priciple of reputation and ethics pay dividends to the pratitioners of it and those dividends are more prevelant during down cycles. Trust and reputation becomes more important during uncertain times. Shaking out an industry every so often is a good thing for the consumer and the industry.
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