Survey Finds 1/3 of Broker Loans Failed to Close Last Month Tuesday, September 11, 2007

WASHINGTON, DC – One-third of broker-originated purchase money closings were canceled last month, as lenders shied away from riskier borrowers, a new survey says.

The survey of 1,700 mortgage brokers conducted by Campbell Communications comes as numerous lenders that catered to subprime and Alt-A borrowers shuttered up operations.

Thomas Popik, who designed the survey, said three years ago a survey of real estate agents found that only 4 percent of transactions failed to close on average, according to published reports from the Associated Press.

Additionally, the survey found 57 percent of adjustable-rate borrowers with resetting interest rates that were working with a mortgage broker were unable to refinance. Brokers also reported that one-in-five subprime funding commitments were not met by wholesalers.