FHA Commissioner Predicts a Growing Broker Market

The changes in the Real Estate Settlement Procedures Act and the implementation of the SAFE Act mean that in the future there will be a viable mortgage broker industry that will grow in size again, declared Federal Housing Administration commissioner David Stevens. Speaking at the Regional Conference of Mortgage Bankers Associations in Atlantic City, in response to an audience member's question, he said that in his opinion, "mortgage brokers play a valuable role in the marketplace." This is because it is a scalable business model that can grow when the mortgage industry as a whole grows and because brokers service areas where other lenders will not serve. But like other parts of the mortgage industry, Stevens said he did not believe mortgage brokers policed themselves well during the run up to the crisis. As for the proposal by FHA to allow wholesale lenders to approve the mortgage brokers they wish to do business with, rather than the agency itself, he told the attendees he believes the end result will be more mortgage brokers being able to originate FHA-insured loans.