A mortgage broker works as an independent intermediary who brokers mortgage loans for companies or individuals. Mortgage brokers are required to obtain pre-approval from borrowers or their representative before offering a mortgage loan to them. This means the mortgage broker has to follow the guidelines imposed by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation’s Office of Loan and Guidance. If you wish to learn more about this, visit more info here
The major role of the mortgage broker is to provide mortgage processing services to their clients with regard to loan processing, home inspection, title insurance and closing. The mortgage process may include title insurance, appraisal and recording for the property, escrow agreement, appraisal of mortgage rate and loan amount, closing documents preparation, withdrawal of cash, appraisal of property condition and repairs. The broker’s service package may also include loan origination and underwriting services. They are also responsible for collecting the application fees from borrowers and providing them with a check, which they use for the services that they have provided.
Mortgage brokers can work directly with lenders or through a broker networks. Some lenders require brokers to work through their networks and allow them to refer loans to the lender for consideration. In this case, the lender pays the mortgage broker a fee based upon the volume of loan referred. The lender will specify the maximum amount it will pay for each loan referred. Brokers in a lender’s network receive a portion of the lender’s commission and benefit from a system in which they receive referrals to potential borrowers, have access to the lender’s loan documents and have the opportunity to negotiate the best interest rate for the borrower.