You'd think that the intense competition of the banking industry, like the airline industry, would push the middle-men out of the business, but it doesn't seem to be working that way.

Since this very business provides for half of the livelihood of my household, I think I can comment on why this is the case.

Banks suck at doing mortgages. Everyone I know who's gone straight to their bank for the mortgage (including us) has all sorts of complaints about how poorly the process was handled and how the bank messed it up completely.

There's so much complexity and bureaucracy surrounding the process that it requires a diligent person to shepherd a loan through the maze. That's a full time job. It's not like, "I can open your checking account for you, make change, help you remember your lost ATM code, deal with unruly teller window customers, AND it just so happens I can also get you a mortgage when I have a minute."

Yeah, some banks have dedicated mortgage officers. But at that point, that person is just duplicating what the middle-man mortgage broker business would be doing anyway, and that person has to get paid just like the independent mortgage broker does, and so it's no different. In fact, in most cases, those mortgage officers at the bank are usually independent contractors that get paid on commission anyway, meaning that they really ARE exactly the same as an independent mortgage broker.