…Posner went on to say that, “Our work suggests that banks and thrifts can’t compete with the GSE’s cost leadership in the investment function, and they are generally less efficient originators than independent brokers and [mortgage] bankers.”

But today, just thirteen years after Posner’s report, the mortgage industry is decidedly not a growth industry; the GSE’s may soon be replaced by private sector guarantors; flexible underwriting and higher leverage are generally out the window; increased compliance costs have more than offset what otherwise would be more efficient and lower cost processing; and the competitive strength of banks and thrifts relative to independent brokers and mortgage bankers has never been stronger. This from Dr. Matt Lind of STRATMOR.”, Excerpt from June 2015 Mortgage Industry Newsletter