“The banks want people to borrow more money. The ideal client [in a housing bubble] for the advisor is somebody who doesn’t borrow money, who has a modest house and saves a lot of money. This client is not interesting to the banks because they can’t make any money off them,” Hilliard MacBeth portfolio manager with Richardson GMP told MBN sister publication Wealth Professional. “Where the banks make all their money -- really 95 percent of profits -- is from clients borrowing money for mortgages, HELOCs, and credit cards.”
An unwelcome suggestion among mortgage brokers who are constantly competing with the big banks for mortgage market share.
According to CAAMP
’s fall mortgage industry report, broker market share fell to 31 per cent from 40 per cent a year prior.
MacBeth, the controversial author whose new book calls for a big crash in real estate prices
, also believes that the big banks will soon face their own day of reckoning when they must decide where their bread is truly buttered.
He got under the skin of many brokers with his prediction of a housing crash, but wait until you hear the advice this leading financial advisor is offering the big banks about their mortgage businesses.