Subprime brokers rushing out of the soup lines!
Now that so many subprime mortgage brokers are out of work, especially those that preyed on first time homeowners and minorities, they are seeking refuge and a paycheck. Lets see, who is left for them to profit on with excess fees and promises of an everlasting real estate investment boom? Latinos, check. Blacks, check. First time buyers, check. Aging Americans with tons of equity. Jackpot!
Of course having more lenders to choose from is great for competition, but when certain bad apple lenders push bad loans at all costs, it makes a zero sum game. I am concerned for the industry once law suits for elder abuse and fraud start to pile up. Not too far fetched considering many other groups have already filed lawsuits for fraud like activities in the subprime markets. Buyer beware. Reuters reports of the mass migration of out of work brokers and the increase of reverse mortgages rising from 7800 in 2001, to 76,000 in 2006.
NEW YORK (Reuters) - Jobless subprime mortgage specialists are looking for employment in the booming market for loans to senior citizens, mortgage market executives said on Tuesday.
Between 12,000 to 15,000 displaced mortgage lenders may begin to seek employment in the growing market for reverse mortgages, an increasingly popular home equity loan for homeowners who are 62 years old or older, Goldman, Sachs & Co. (GS.N: Quote, Profile, Research and Wells Fargo Home Mortgage executives said at a mortgage conference.
“A percentage of them will migrate into the reverse mortgage business, but it’s very specialized,” Jeffrey Taylor, Wells Fargo’s vice president of senior products, said during a Mortgage Bankers Association conference in New York. Full Story
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