Fundamental risk management is causing banks to forego originating loans through mortgage loan brokers (MLBs), choosing instead to offer loans only through their own branches. The number of MLB firms in the United States has shrunk from 54,000 to 30,000 since 2005. Meanwhile, the current rush of homeowners refinancing on their homes has been a source of additional income for banks but has done little to benefit MLBs. While banks are refinancing homeowners, they are unwilling to take on the risk of purchase-assist loans, causing the purchase-assist loans needed by home buyers to become ever more scarce, and more costly.

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