CNN have reported that there were 90,000 mortgage industry job losses in 2007, I know of one of them, my old room-mate in Chicago Maurice Mulroe. He is a father of two and was in the industry for a decade, then one day he walks into work and out of the blue is told to go home ‘it’s over’. It took him 7 months to find another job that his skillset could qualify him for, and even low paid jobs were being hotly contested by the new wave of skilled redundancies.
Often redundancies are in industries that are mainly unskilled or manual but the Mortgage Crisis in the US has put people with college degrees, years of expertise and experience out in the cold, and that was part of what gave early January’s increase in the unemployment statistics.
The same thing has happend (albeit to a lesser degree) here in Ireland, Fresh Mortgages entered the market during 2007 and they were a good bunch of people, good at what they did too but then they got their funding pulled from them and then you have the situation where there is a Mortgage Lender who can’t lend….. Doesn’t take a genius to figure out where thats going (see picture left for a graphical reference to the outcome).
Fresh had to lay off their staff before Christmans. What did santa bring? Redundancy… Anyways, I have since heard that they are closing down as an entity and that is a terrible shame, good business gone wrong. We’ll miss them, but maybe not because if the trend from America on mortgage industry job-losses materializes here then I’ll be out on the street as well.
I don’t believe this will happen, why? Because lenders are and always have been more prudent here, more conservative and the industry is more transparent, in the US mortgage brokers can place a loan and then change it a week later and get paid again without losing the initial income they made from the loan, that’s not the case in Ireland, as well as that, many brokers can actually lend money on behalf of banks and that also doesn’t happen here. Lenders in the USA will let you borrow to the wire, here they don’t and they factor in things like increased rates and vacancies in rental properties. Regarding the market, well, almost every property still has a mortgage on it so we have plenty of clients to please!
So I feel comfortable stating that we’re going to survive as an industry and thrive because we still offer more choice than going direct to a bank. And thats fundamentally what it boils down to, until there is no more money or until every mortgage is paid in full Brokers will survive.