Released: August 31, 2007

Mortgage brokers fall on tough times

Source: Paul Davidson, USA Today

Mortgage brokers are leaving the business in droves as the crisis in subprime mortgages leads to fewer products to sell, tighter lending standards and a backlash from lenders who blame them for the meltdown.

Brokers don’t lend money, but they match home buyers with lenders in 58% of all home loans. They typically offer loans from a dozen or so banks and lenders, earning commissions of 1% to 3% from the borrower, lender or both. Their ranks swelled during the real estate boom.

Several thousand of the nation’s 53,000 brokerages closed this year, say the National Association of Mortgage Brokers and research firm Wholesale Access. By early 2009, just 30,000 firms will handle fewer than half of all home loans as the industry suffers a record shakeout,

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