What We're Hearing

Monopolies are good for one thing: profit margins. In a handful of conversations with analysts and mortgage executives this past week one thing seems clear: earnings on new originations are expected to be quite strong in 1Q. We're already seeing evidence of this from Wells Fargo. But keep in mind: the nation's mega lenders are now a cartel. They've marginalized loan brokers -- and correspondents. Non-banks are having a tough time getting a warehouse line and most of the top five mega banks/mega residential lenders are loathe to give them one or get too heavily involved in that business. And why should the top five? They have it good right now: little competition and the ability to heap on adder fees to new borrowers. Can anyone break the cartel?