In the world of mortgage lending, credit institutions often utilize the services of a mortgage broker to sell their mortgage products. The activities of the mortgage brokers are regulated, although in some countries there are no laws governing them.
Banks and lending institutions have resorted to the practise thanks to the stiff competition existing in the mortgage lending arena.
The range of services provided by credit brokers include selection of the optimal lending options, full support of clients’ projects, and negotiate with creditors. On the basis of individual agreements with banks and other financial institutions, brokers can offer their clients the most favorable conditions at good rates.
The nature and scope of a mortgage broker’s functions varies with jurisdiction. But in general, the list of services of a mortgage broker include analysis of documents, evaluate the solvency of the borrower, selection of the optimal credit program in accordance with the needs of the borrower.
The brokers also engage in detailed calculation of all related costs, comparative analysis of schemes of repayment of the loan, recommendations for improving the status of the borrower, compilation of a full package of documents for submission to the bank, and reducing the period of the application among other things.
And the advantages of brokers intermediary role include the ability to get professional financial advice, derive savings from a properly chosen credit program, save time. Proper filing of documents and filling out the necessary forms, which increases the likelihood of a positive decision as regards the granting of a loan. Individual and independent approach to financial matters and protecting the interests of the client, rather than a specific financial institution.
A mortgage broker is usually registered with the relevant regulatory bodies in his/her jurisdiction, and bears liability for any fraudulent activities for the duration of a loan arrangement.
Generally, a mortgage broker earns far much more money compared to a loan officer, although a loan officer is in a position to use the lending institution’s referral network to land more customers.
However, some mortgage brokers, bankers, realtors and others may be involved in illegal lending. And the most common types of broker fraud involves counterfeit income certificates, forged evidence of ownership of assets and other documents.
Incomplete explanation of the borrower credit conditions and policies of the bank, concealment of the percentage fees or other fees, before signing the agreement with the borrower. Conspire with the appraiser to raise property assessment and use in their lack of experience to the borrower in matters of credit.