A mortgage broker, also known as a broker of mortgages, is an intermediary between a borrower and a lender. These are brokers who work on behalf of both individuals and companies who seek mortgage loans.
Getting the best deal
If you want the best deal for your money, you should consider working with a mortgage broker. Using a broker can save you time and energy, and it can also steer you away from onerous payment terms. Mortgage brokers have access to many lenders, so you can choose the lender that’s best for you. However, there’s no guarantee that you’ll get the best deal. So before you get started, here are some tips to help you choose the right one for you.
Getting the best mortgage loan can be a daunting task. While there are several online resources that can help you research the many available options, there’s nothing like a face-to-face meeting to get an actual feel for the type of lender you’ll be dealing with. In addition, a broker will likely have access to better rates than you would be able to find yourself.
The mortgage industry has changed considerably in recent years, so you may want to do some homework before you sign on the dotted line. For instance, if you’re purchasing a new home, you’ll need to factor in the cost of home insurance as well. You’ll also want to ensure that you can meet mortgage deadlines.
Fees
Mortgage brokers help borrowers through the loan process. They match borrowers with lenders who offer the best loans for their needs. Using a broker can save home buyers time and effort.
Depending on the lender and broker used, the borrower may have to pay a fee. This can include an origination fee, a lender’s mortgage broker fee, or a loan administration fee. It’s best to discuss the details of the fee with the broker before you start the process.
Fees for mortgage brokers can vary greatly. Some brokers charge borrowers directly, while others get paid by the lenders they work with. Paying a lower upfront fee makes sense for short-term borrowers. For long-term borrowers, paying more up front for a better interest rate can make sense.
Brokers also must adhere to federal law. Mortgage brokers cannot make kickbacks from their affiliated businesses, and must report disciplinary actions and complaints to the National Mortgage Licensing System (NMLS). Likewise, they are prohibited from charging hidden fees.
Liability for fraud
Mortgage brokers may be held liable for fraud and deception if the information they provide is false. This can be the result of their own actions or the actions of others, including other real estate agents, lenders, and even buyers.
Fraud for profit occurs when a real estate broker, loan officer, or appraiser commits false statements or deception to increase the value of a property or to get a loan. Some common examples of this kind of activity are inflated appraisals and fraudulent flipping. These practices often involve real estate agents, builders, and other industry insiders.
Mortgage fraud also involves falsifying information in the mortgage documents. For example, a loan officer could provide false information about a house’s driveway, pathway, or right-of-way. The borrower would rely on this information, which could lead to him or her securing a mortgage. If the loan is not paid, the broker may be liable.
Residential mortgage fraud is a class A misdemeanor. It can also be prosecuted as bank fraud or wire fraud. In addition, federal money laundering provisions may also give additional bases for federal criminal liability.
