Mortgage Brokers Scramble to Retain Business, Reassure Public of Ethical Standards Amid Bust

International Herald Tribune (02/01/08)
Mortgage brokers are struggling to maintain their reputations and businesses as various individuals and entities point fingers at them for the subprime mortgage crisis. Many have been forced out of business, with a report from the Labor Department indicating that 26,000 have lost their jobs since April 2006. Friedman, Billings, Ramsey & Co. analyst Paul Miller expects another 130,000 of the remaining 400,000 mortgage industry jobs to be lost before the market's troubles subside. Industry groups are ramping up efforts to promote mortgage brokers as ethical professionals in the meantime, with the Upfront Mortgage Brokers Association making members pledge not to impose unanticipated fees on borrowers. Meanwhile, the National Association of Mortgage Brokers will institute mandatory continuing education standards and criminal background checks as well as require members to abide by an ethical code of conduct in order to secure the group's "seal of approval." Wholesale Access forecasts a drop in brokers' market share of new mortgages to 40 percent this year from 60 percent during the last decade, with banks making more direct loans.