What happens if a broker cannot sell your new mortgage loan because of the current state of the loan industry

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I recently closed escrow on a new home mortgage, but because of the recent chages in the home mortgage industry, the broker cannot sell the loan to a traditional bank. They are basically stuck with the loan. Is there anything I should be concerned with?
I recently closed escrow on a new home mortgage, but because of the recent changes in the home mortgage industry, the broker cannot sell the loan to a traditional bank. In otherwords, from what I am being told by my loan officer, is that when the loan funded, the bank that was to buy the loan closed its doors. Now that brokerage is stuck with the loan… Is there anything I should be concerned with?

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  1. Reply
    January 22, 2011 at 4:36 am

    For starters brokers don’t sell the loans they write. They are middle-men who pre-arranged the loan with a lender. If your loan id closed and funded with a lender you have nothing to worry about. Worst case for the lender is that they have to service your loan until they find an investor in the secondary market willing to by it. (The secondary market being where all of the problems exist by-the-way.)

    If you are currently doing business with a broker who is claimimg he can’t sell your loan so it won’t fund, he/she is selling you.

  2. Reply
    January 22, 2011 at 5:33 am

    Nope, if you closed and the bank cant find someone to sell your loan to, then they are stuck servicing it. You met your end of the contract…. and if the loan is funded and closed, its nothing for you to be concerned with.

  3. Reply
    January 22, 2011 at 6:29 am

    I think the broker is screwed… Hopefully its a big company…

  4. Reply
    January 22, 2011 at 6:40 am

    If you closed the loan, it should not longer be your problem. But the previous poster is correct: a Broker would not be selling a closed loan…

    But, I’m going to go out on a limb here and say that your Broker used his wholesale line to fund your loan and is now stuck with the loan. This can be very expensive to the Broker, but in no way is this your problem. If the Broker is contacting you indicating this is an issue, call your state mortgage commissioner’s office and ask for help. They should be more than glad to help you get that Broker out of the mortgage business.

  5. Reply
    January 22, 2011 at 6:56 am

    Brokers don’t sell loans, they match up borrowers and lenders. Whoever your broker matched you up with may be having a problem shopping your loan to an investor. That’s his problem, not yours.

  6. Reply
    January 22, 2011 at 7:10 am

    I am a broker. Brokers don’t fund loans. Bankers do. Brokers refer loans to lender who in turn close the loans. If your banker got stuck with a loan, then continue to pay the banker. That’s his problem. I have seen it alot lately. It’s a shame.

  7. Reply
    Albert N
    January 22, 2011 at 7:20 am

    Check out this site, I’m sure they have the answer you’re looking for.

  8. Reply
    Mark M
    January 22, 2011 at 7:31 am

    Just to clarify with the confusion I see in some of the answers…

    Brokers can fund their own loans and then sell the loans.

    For those who don’t understand this, run a search on “mortgage table funding” , “correspondant mortgage lending” and “mortgage broker warehouse line.”

    Some brokers have taken on the name “Mortgage Banker” if they sell loans funded from their warehouse line. Some have not. Soon, “Mortgage Banker” will be completely accepted.

    It sounds like, as someone else answered, the Broker funded the loan on their warehouse line and the investor—who made a commitment to immediately buy the loan—went out of business.

    This is in no way the Broker’s fault and you should do all you can to try and help the Broker get this loan off his warehouse line.

    You could run into trouble, but more of an “inconvenience trouble.” I won’t explain all the pitfalls of what I have seen in the industry here. I will just say you should, if you can, try and get this loan off the warehouse line as soon as you can by refinancing. You will probably save some money by doing so anyway.

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