A mortgage broker is somewhat of a middle man who goes between lenders and borrowers to sell loans. The role of the mortgage broker has grown in recent years, making their roles key figures in the home loan business. Brokers, in most cases, have a variety of responsibilities, and are responsible to help borrowers to get the most reasonable rates when dealing with lenders.
However, in recent years, mortgage brokers were largely blamed by the media and the public for causing much of the foreclosure crisis. Many consumers claim that they were placed into unaffordable loans with high interest rates that benefited the brokers bank account more than the borrower. Some of these same people are now in foreclosure or have already been foreclosed on.
To place all blame on any one entity or to say all mortgage brokers are bad is ludicrous. There are a lot of financial professionals that have been in this business a long time and are very good at what they do. Unfortunately, the bad apples of the subprime lending days have caused the whole industry to suffer immensely.
If you are looking into this business or want to find out what they do, I’ll list some of them here.
These responsibilities include, but are not limited to:
- State brokers license to legally sell mortgages
- Attracting customers via marketing
- Assessing the situation and circumstances of the borrower through interviews and paperwork to determine their financial state and current credit level
- Assessing the market in order to perceive what deal best fits the client’s needs
- Acquiring pre-approval on behalf of his/her clients
helping them to complete all necessary forms
- Explaining the legal courses to them so that they understand the lending process
- Submitting any and all material to the lender.
So, as you can see, mortgage brokers do a lot more than simply acting as a middleman with the bank. It is not necessarily required to go through a mortgage broker because going directly to the bank may offer you a better loan. Some brokers believe that since they have access to multiple lenders and are able to locate much better deals for borrowers.
The answer you get often depends on who you are speaking with. But for the most part, we at LoanSafe.org believe that going direct to a few banks and comparing the various loan offers is the best route for mortgage shoppers.