kinda interesting…
MORE LENDERS MAKE CUTS;
Group sounds warnings
BYLINE: By JAY FITZGERALD
SECTION: FINANCE; Pg. 021
LENGTH: 321 words
The Massachusetts Mortgage Association warned yesterday of possible layoffs and reduced mortgage products due to additional lenders scaling back activities here as a result of new regulations.
“I’ve been in this market for 18 years and never seen anything like this,” Denise Leonard, the association’s executive director, said of firms announcing they were either pulling out of the Massachusetts market or curtailing offerings due to new mortgage-related rules that took effect yesterday in the state.
The Herald last week reported that Well’s Fargo and Indymac Bank were either radically changing the way they compensate mortgage brokers or ceasing lending altogether due to new rules implemented by Attorney General Martha Coakley.
Leonard said her organization has since learned that other lenders are pulling out or changing the way they do business here, too.
They include Freedom Mortgage, GuaranteedRate, Crescent, AmTrust, Taylor Bean & Whitaker, Countrywide and Vertice, she said.
She warned of “huge economic impacts” if those companies cut back their business with area mortgage brokers, some of whom may go under if those firms sharply limit lending deals with them.
She added out-of-state lenders that remain will be offering fewer types of mortgage products, which could be “extremely detrimental to consumers.”
But Coakley, who last month issued guidelines she hoped would soften any blow against the mortgage industry here, is refusing to back down from her new rules, which she said are intended to reduce industry abuses that contributed to the subprime mortgage market crash.
Bruce Marks, head of the nonprofit Neighborhood Assistance Corp. of America, said he feels little sympathy for the mortgage-brokerage industry, which he said treated many customers unfairly before the recent subprime mortgage meltdown. He said Coakley’s new rules will help “bring back fairness and integrity” to the mortgage market.
