WaMu Ditches the Wholesale Mortgage Biz
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wamu, washington mutual, wholesale April 8th, 2008Word is the private equity cash infusion Washington Mutual is in line for comes with a condition: Cut the bank’s risk in mortgage lending
Troubled thrift giant Washington Mutual (WM), once one of the biggest players in residential mortgages, will stop making loans through independent mortgage brokers—what the industry calls the “wholesale” side of the business. Instead the company will focus on loans through its 2,200 retail bank branches.
Mitch Ohlbaum, chief executive of Legend Mortgage, an independent mortgage broker in Los Angeles, says he was told by a WaMu representative that Apr. 10 will be the last day to submit new loan applications. The wholesale business is considered risky because lenders have to offer very competitive terms to win business over dozens of rivals. Wholesale lenders are also relying on independent brokers to accurately provide borrower information.
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