According to Mortgagestats.com, three banking institutions accounted for 58.5 percent of mortgage volume in the final quarter of 2009. The three are Wells Fargo, Bank of America and JPMorgan Chase.
Whenever a cartel forms, you have an example of a market failure that eventually harms consumers. In my lifetime, I've seen companies form (or try to form) cartels in oil, silver and lysine, to name a few. None of those ended well. Will we fight a mortgage cartel next?
Government makes this situation worse. Clearly, Fannie Mae and Freddie Mac want to work with as few bank lenders as possible, making work simpler for Fannie's and Freddie's federal overseer. The Federal Housing Administration has cut out small brokers.
What do you think? Do you disagree -- do you believe that large lenders will pass on their efficiencies to customers in the form of lower rates and fees? Or do you share my concern? Comments, please.