Dwight – In some states, like NC, brokers need to have background checks, credit reports, take a class and exam. While I feel the requirements could still be higher, bank loan officers (like Wachovia ones) are exempt from even these regulations… they are in no database and the state has 0 knowledge of who they are. Brokers have far higher standards to enter the industry and remain there.

Of course there are bad brokers that commit fraud. There are also lenders that do the same.

Speaking of “sane and honest lending practices” ignores that Wachovia sought out and purchased one of the largest Option ARM lenders there was. They advertised their happy, dancing people about the “Pick-a-Pay” Option ARM until 2 months ago…. well past when warnings were clear that these programs were sold by their loan officers inappropriately. Plenty of reports showed how their own loan officers were given incentives to sell this product to anyone that would call. Now they have to pay the price for that business decision.

A retail rep –at worse-loses their job and gets another one with another large retail mortgage operation.

I for one am sick of everyone thinking fraud only occurs at the wholesale level. I have been in the biz for about 20 years and have numerous friends on both sides of the origination. Believe me when i tell you the retail originators are or were very much willing to do fruad.

Wachovia and Wamu are in the mess they are because of they tried to be too big in an industry that was poised to contract. Both companies we apparently run by idiots.

Give.me.a.break.

But it is a said day for all those people getting laid off at Wachovia. One of my ex-co-workers at Plaza Home Mortgage when to Wachovia and just got laid off. Morgan, I swear, I just started hearing the words on CNBC again yesterday, “Is the worst over now?”……..I feel like reaching into the TV, yanking those people by the throat and saying, “F NO!!!”

Wholesale lending is alive and well. In fact I think last weeks action by they Federal Reserve to leave YSP alone speaks volumes about the top regulators opinion of the need for mortgage brokers.

Wachovia like Wamu's mortgage failiures create more opportunities for brokers. Keep in mind that Wachovia (like wamu) stated they intend to keep mortgage originations close to their branches. Hello thats opportunities for us brokers.

Isnt it amazing that this brilliant company spent 29 billion last year for a company that originated pay option arms? Remember Wachovia's is under the management of the former First Union Clan. Remember they owned perhaps the first well known predatory lender “The Money Store” .

This in no way leads to demise of the wholesale community to originate just hard money loans. This is certainly two large orginators scaling way back. I see opportunities for originators and nothing less.