The National Association of Mortgage Brokers is mad as hell, and they’re not going to take it anymore. At least, that’s the message that NAMB president Marc Savitt sent last week in responding to comments made by JP Morgan Chase & Co. (JPM) CEO Jamie Dimon after the well-known banking CEO appeared to denigrate broker-based mortgage originations in a speech last week. In a speech before the U.S. Chamber of Commerce 3rd Annual Capital Markets Summit, Dimon stated that his failure to terminate the company’s mortgage broker business was the “biggest mistake” of his career. The third-party origination channel has largely been decimated by the current credit crisis, as numerous banking officials have suggested in the past 18 months that broker-originated loans have performed significantly worse than retail originations. “It is disappointing to once again refute senseless attacks on the mortgage brokerage industry based on misinformation,” said NAMB’s Savitt. “Mr. Dimon’s comments clearly reflect his poor understanding of the mortgage industry and the role of the mortgage broker.” Savitt argued that “mortgage brokers do not create loan products, do not determine the automated underwriting systems used to qualify borrowers, do not underwrite the loans, and do not approve borrowers for those loans — Wall Street investment banks ‘who are now out of business’ did that.” It’s an argument sure to resonate with NAMB’s constituency, but more than a few investors that spoke with HousingWire expressed strong criticism of Savitt’s views. Some were in an audience a few weeks ago, when Savitt took his “brokers aren’t to blame” message to an executive housing summit in Park City, Utah; that conference’s audience was primarily investors. “It’s like he’s saying [brokers] didn’t do anything in the transaction, we just took orders,” said one investor, a well-known hedge fund manager. “Well, then why were brokers getting paid at such a ridiculous level? They took no risk in the transaction, had no skin in the game. That’s the problem.” Another source, a senior executive at a large bank that asked not to be named in this story, agreed. “I don’t know that the TPO business is a bad one inherently, but it’s one where compensation and incentives are often misaligned relative to any long-term interest on behalf of the borrower,” he said. “Brokers have an inherent incentive to game the system, to find a way to get a loan approved, and he’s saying it’s our fault for a failure to catch that when it happens. That’s only partly true.” For his part, Savitt argues that brokers “add value to the process for both consumers and lenders by serving areas that are typically underserved by banks and other lending institutions,” and “by providing goods, facilities, and services with quantifiable value, including a customer base and goodwill.” For all the criticism the mortgage brokerage business has taken as of late, however, it’s worth noting that not all banks have come out roaring in protest against the origination channel. Union Bank of California senior vice president Craig Cole, for example, told the Orange County Register recently that “most lenders mismanage the broker channel by not being disciplined about who they work with and offering products indiscriminately through that channel.” Write to Paul Jackson at [email protected]. Disclosure: The author held various put option contracts on JPM when this story was published, and no other relevant positions. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.