Former NAMB Chief Falk: Wholesale Will Be Back

Even though the wholesale residential lending channel appears to be on the ropes, it will return one day, according to Joe Falk, past president of the National Association of Mortgage Brokers. In an interview with MortgageWire Mr. Falk said that the some lenders are factoring in such costs as loan fraud and appraisal problems, concluding -- based on the book of business of the past few years -- that retail is cheaper. "Lenders have to ask if retail is now cheaper," he said. He noted that firms that have exited the wholesale arena this year (like National City and Wachovia) have reached such a conclusion. But Mr. Falk believes that when the loan market begins to stabilize, lenders will once again conclude that wholesale is a more cost effective way to do business. He said that Citigroup's recent decision to slash its wholesale broker network was not a surprise.