All About Being A Mortgage Broker

August 22, 2012

Mortgage Brokers

All About Being A Mortgage Broker
Mortgage brokers act as intermediaries between the client and the lender. Traditionally banks and lending institutions sold their own products but as the market became more competitive the role of the mortgage broker or mortgage agent grew. Today mortgage brokers are the largest sellers of mortgage products for lenders. A fee is charged for the service of finding the right lender for a client and processing the loan through underwriting. Most brokers are regulated to comply with banking and finance laws in their area.

It is the job of the broker to assess a borrowers circumstances including running a credit report, verifying income and assessing the market to find a product that fits the clients needs. They may also get pre-approval for the client in the case of a home purchase. The broker will have to gather all needed documents including pay stubs and bank statements, have the client complete an application form, explain legal disclosures, submit the package to a lender and offer the best loan for their client.

In a recent study it was noted that 68 percent of all residential loans in the U. S. Originate from brokers. The broker is regulated by 5 federal enforcement agencies, 10 federal laws and 49 state laws or licencing boards. A broker is registered with the state they reside in and are personally liable for fraud for the life of the loan. There are legal, professional and moral responsibilities and liabilities that are meant to prevent fraud and provide full disclosure of loan terms to both the lender and the consumer.

The difference between a banker and a broker is that the banker can use a short term line of credit known as a warehouse line to fund a loan until they can sell it to the secondary market. They repay the warehouse lender and make a profit on that sale. The borrower receives a letter that their loan has been sold or transferred. Bankers sell most of their loans.

Brokers have to disclose a yield spread premium that bankers do not. The Good Faith Estimate allows consumers to compare fees. The government requires this form because some brokers were quoting one rate and fees and changing it before the loan documents were drawn.

Basically, to be successful as a mortgage broker you should know the industry. Get to know the real estate agents in your area for leads and get to know the local market. Read banking trade magazines, business periodicals and real estate journals. Learn the loan and funding processes for the different types of loans that are available for your clients. The more connected you are and the more knowledgeable you are the more successful you will be.

This is a people person job, it requires a lot of relationship building and it must fit your personality type. You have to be a salesman, have ambition and a be self-starter as you will be your own boss. Discipline is critical. Check the state where you live to find out what the requirements are to practice as a broker. Take the test and classes that you need.

Be familiar with the laws on mortgage lending in your state. Contact a local mortgage lender about a job if you wish to join a firm or you can work on your own if that is more your style.

A career as a mortgage broker or can be very rewarding. If you have a good head for numbers, consider enrolling in a mortgage broker course or even in various mortgage broker courses.

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