Raphael Bostic, a professor of real estate and associate director with USC's Lusk Center for Real Estate, said banks didn't carefully scrutinize brokers or their loans when most mortgages could be profitably sold. That's all changed amid a housing downturn two years long and still going. Banks are looking for the causes of costly defaults and finding the "safety of broker loans is qualitatively different," Bostic said.
"Brokers are not going away, but I do think how they do business is going to change," Bostic said. "They will be subject to much more scrutiny then they have in this last little bit, and I'm not sure that's a bad thing. The brokers to some extent have slipped through regulatory cracks."