Wachovia says bye-bye to mortgage brokers

July 21st, 2008, 3:50 pm · 12 Comments · posted by Mathew Padilla

Wachovia will stop funding loans via mortgage brokers after Friday, July 25, as it continues to respond to a “challenging market environment,” company spokesman Don Vecchiarello said.

“We will still continue to sell mortgages via Wachovia-branded retail sales staff, over the phone, via the Internet and direct mail,” he said. “We believe it is important to focus on serving the needs of customers that have a relationship with the bank.”

The company, which reports earnings tomorrow, did not release a statement on the move, which was first mentioned on the Implode-o-Meter Web site this morning.

Vecchiarello declined to comment on how many wholesale employees will be let go, or if there are any layoffs in Orange County.

This latest change in its lending model follows Wachovia’s elimination last month of loans that allow borrowers to select a monthly payment, including one option that resulted in homeowners owing more to the bank. Dropping the payment-option loan raised eyebrows, since it was the bread-and-butter of Golden West, a company Wachovia paid $24 billion to acquire in May 2006.

By the way, check out a previous post from Jon Lansner: Wachovia CEO sees ’soft housing’ well into ‘08.

And in other news:

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bpsqwerty says:

July 21, 2008 at 4:22 pm

hopefully for good, and others follow suit…

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bobarty says:

July 21, 2008 at 8:36 pm

Good, mortgage brokers are bottom feeding scum. Completely useless profession that did nothing positive this decade. And before someone calls me a jerk or something, answer me this questions: “How come some guy from my high school who dropped out, has a cocaine problem, and sold cars before getting into mortgage was able to become a mortgage broker?”.

ReloMan says:

July 21, 2008 at 10:23 pm

Not sure why this is news. Vertice has been the main wholesale outlet for Wachovia for quite some time. Vertice appears to here to stay (unless they decide to make stupid loans again).

Larry P. says:

July 22, 2008 at 1:23 am

bobarty,

To answer your question, because the state doesn’t stop lenders/brokers from hiring people as “trainees” or non-document signing “Jr. Loan Officers” that’s why. More stringent licensing REQUIREMENTS and regulation weed out the “bottom feeding scum” as you eloquently put it. I’ve wanted that for YEARS because that “scum” gave all of us a bad name as you and bpsqwerty so adroitly painted with your broad brush of scorn! I myself graduated from college, have never tried cocaine, worked in corporate finance management for 12 years BEFORE I went in to the mortgage world and became a mortgage planner. Yeah, they let a guy like me in too!

Now, let me ask you a question: What USEFUL profession do you work in? Try to be honest with your answer please. Thank you

Dina says:

July 22, 2008 at 6:14 am

Good, now move up the food chain.

Bill-1a says:

July 22, 2008 at 7:31 am

bobarty: I worked in education for over ten years. Have a Masters degree, and have worked in the real estate mortgage industry for over 30 years. I’ve coached little leagues, put two children through college, and am very proud of all the relationships I’ve established over the years with my clients. That being said, every industry has their black sheep, including the mortgage, however every industry has their professional, educated, honest, hard-working individuals that make a living helping people, including the mortgage industry. To lump all mortgage people into one category only demonstrates your lack of judgement and intelligence.

July 22, 2008 at 10:55 am

Bill-1a,

You’re wasting your time…he won’t respond to either of us! The bobarty’s, bpsqwerty’s, and Dina’s have their opinions shaped by the salacious stories and conspicuous consumption of the “coke sniffing high school dropout” order taker class of “Mortgage Broker” or more accurately “loan officer” from the past 6 years. And they are not without good reason to have these feelings about the industry quite frankly even if they have no comprehension of what a service the mortgage broker was originally there for and that the good ones like you or I still fill.

If banks REALLY offered a cheaper alternative to Mortgage brokers and carried any and ALL loan products with uniform guidelines at each and every financial institution then mortgage brokers would go the way of the Dodo. But they don’t and so Mortgage Brokers WON’T go away….Wachovia, BofA, the rest are cutting back on Wholesale operations to save money…NOT to “punish” mortgage brokers off of whom they made BILLIONS!!! They WILL re-establish their wholesale channels when the market ultimately steadies and banks are in the mood to lend money again. With the big banks it’s just business…not personal!

Of course, what’s kind of ironic is when you think about it just how many jobs and careers ARE truly “Useful”? Doctors? Engineers? A handful of others. Not much beyond those that can’t be outsourced or done away with completely with a change in technology or improved business efficiency and uniformity. I mean does the world really NEED as many restaurants, clothing stores, dry cleaners, office workers, mail carriers, deliverymen, bartenders or many of the other “professions” represented by posters on this board? Most people work in a state of arrested obsolescence already but they don’t even know it! A simple change in the economic winds or technological growth is often all it takes to erase whole sectors forever…and create new ones! Folks like bobarty rail against the “uselessness” of fields like mortgage brokering and real estate sales all while some guy in China or India is preparing to take HIS job because his job may be ultimately “useless”….as are most!

Be careful the ill will you wish on others folks…you may find out just how “useful” your chosen career path really is when the chips fall…and some ignorant folks on an anonymous blog will rail at YOU and tell the world how you “Deserved” to lose your livelihood and how everyone that performed YOUR job was just a “Scum sucking bottom feeder anyway so who cares?”

July 22, 2008 at 11:09 am

Oh and btw….rates on Fannie/Freddie and FHA loan programs hit new highs for the year today for anyone who cares.

Louis says:

July 22, 2008 at 12:21 pm

sounds like boparty is one of those type of people that go with the best rate (or so they think) they can find over the phone, internet etc….

the fact is buying a home is one of the largest financial decisions one makes in their life, and not getting a “referral” from a trusted source is just plain stupid……

I bought a home and the lender I used was very professional, experienced, and still communicates with me via internet emag, ecards etc.

I found him to be honest, and very knowledgeable and explained everything to me….later as I spoke to others I continued to hear very high marks about him in the community, and am so thankful that I did not use another lender that was slightly lower in closing costs at the time, and offered some of those exotic loans one hears about.

mortgagemaker says:

July 22, 2008 at 2:17 pm

anyone that thinks that going to a bank is better than having a broker help them with their loan is simple wrong. Wochovia’s problems have nothing to do with Brokers - they dumped brokers because they have no money to lend……. their main product was the pay option arm - which they no longer offer via a broker or at the bank. Here is an example - i just worked up a cash-out fnma loan with 3 banks- B of A, Wells Fargo and Flagstar. The same exact loan had pricing that varried by $7000 in fees with a rate of 6.5% from one bank to the next. Does that open anyones eyes as to why a broker is better?????

July 23, 2008 at 7:53 am

mortagemaker: Your last two sentences summed up (a book’s worth) of reasons why mortgage brokers provide the service they do. Thanks.

Orange County Register