Mortgage guidelines and rules are changing daily because of the current mortgage crisis. Foreclosures are up, and the Atlanta market is eighth in over-all foreclosures nationwide. Larger investors are turning down four times as many loans and have dropped more than half of the programs as they less than a year ago. This isn't a very optimistic picture for those smaller lenders and brokers that are trying to keep their heads above water.

Atlanta mortgage brokers operate as a virtual lending arm for larger banks like Countrywide, Chase and Bank of America. Basically they capture business that the larger banks retail divisions miss or can't handle. Larger banks, by in large depend on loan originators with less experience to process loans. The loans are then processed through their financial assembly line to obtain a closed loan. Each person within the chain has a specific job but rarely has time to change programs, rates and terms in the middle of the process that would upset the assembly line.

For the most part, this is where smaller lenders and brokers carved out their living. These mortgage companies have the time, personnel and experience to "shift gears" on more difficult loans. Now that a large percentage of the "difficult" loans are non-existent in today's market the rules are changing. Larger banks are beginning to give emphasis to their retail departments while tightening the rules for the broker relationships they have established. Many smaller broker shops are feeling that this is the larger investors' way of closing down their wholesale divisions.

However, some Atlanta mortgage brokers are seeing the glass "half full" during this time of crisis for most people in the lending industry. Jeff Stephens, president of Global Lending in Atlanta Georgia sure seems to think so. "Before the mortgage boom brokers provided a real service for a certain segment of the market. Our services are needed now more than ever. There are a dozen different investors with a hundred different products each having 30 or more pages of guidelines. A professional broker will know which programs will save the borrowers the most time and money".

He continued, "the very fact that banks are turning down 4 out of 15 loans makes our services almost indispensable. More than half of the loans that are turned down by one investor may very well work with another investor. Applying to the wrong lender, or having your application presented without all of the facts can cost you thousands in today's changing market."

-Hundreds of small brokers and lenders have thrown in the towel as a result of the looming mortgage crisis and many more are expected to follow. The number of smaller broker shops that are still in business are roughly the same amount there was before the refi-boom. Some are seeing this as a market correction, in effect the hangover after the party. Still others are taking a more legislative view point by asking elected officials to reenact GAFLA (Georgia Fair Lending Act) laws that were passed by Governor Roy Barnes during the middle of the boom.

The editors of Lendfast.com believe that this is a market correction and further legislation will only slow down or halt the recovery process. Historically, when law makers dismiss foreclosure remedies and raise lending liabilities lenders simply stop lending their money. During the "hey-day" of GAFLA we saw a mass exodus of lenders from the state of Georgia based on their inability to sell their loans with Georgia laws attached to them. Adding this stipulation to lenders in this market will be disastrous to our economy and bring lending to a screeching halt for lenders small and large. If we let the "wound" heal, the "band-aid" can be removed in a year or two and you can bet lenders will be more conscious of their lending practices.

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