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From Wikipedia, the
free encyclopedia A mortgage
broker acts as an intermediary who sells mortgage loans on behalf of
individuals or businesses.
Traditionally, banks and other lending
institutions have sold their own products. However as markets for mortgages
have become more competitive, the role of the mortgage broker has become
more popular. Today in most developed mortgage markets (especially in
Canada, the U.S., the UK, Australia, New Zealand and Spain) mortgage brokers
are the largest sellers of mortgage products for lenders.
The majority of mortgage brokers are
regulated to ensure compliance with banking and or finance laws in the
jurisdiction of the consumer; however, the extent of the regulation depends
on the jurisdiction. Only one state within the U.S. has no laws that govern
mortgage lending. |
Tasks
of mortgage broker
Banks' activities can be divided into
retail banking, dealing directly with individuals and small businesses;
business banking, providing services to mid-market business; corporate
banking, directed at large business entities; private banking, providing
wealth management services to High Net Worth Individuals and families; and
investment banking, relating to activities on the financial markets. Most
banks are profit-making, private enterprises. However, some are owned by
government, or are non-profits. Central banks are normally government owned
banks, often charged with quasi-regulatory responsibilities, e.g.
supervising commercial banks, or controlling the cash interest rate. They
generally provide liquidity to the banking system and act as Lender of last
resort in event of a crisis.
The nature and scope of a mortgage broker's
activities varies with jurisdiction. For example in the UK anyone offering
mortgage brokerage is offering a regulated financial activity; the broker is
responsible for ensuring the advice is appropriate for the borrowers'
circumstances and is held financially liable if the advice is later shown to
be defective. In other jurisdictions the transaction undertaken by the
broker may be limited to a sales job: pointing the borrower in the direction
of an appropriate lender, no advice given, and a commission collected for
the sale.
Therefore the work undertaken by the broker
will depend on the depth of their service and liabilities. Typically the
following tasks are undertaken:
- Marketing to attract clients
- Assessment of the borrowers
circumstances (Mortgage fact find forms interview). This may include
assessment of credit history (normally obtained via a credit report) and
affordability (verified by income documentation).
- Assessing the market to find a mortgage
product that fits the clients needs. (Mortgage
presentation/recommendations)
- Applying for a lenders agreement in
principle (pre-approval)
- Gathering all needed documents
(paystubs/payslips, bank statements, etc.),
- Completing a lender application form.
- Explaining the legal disclosures.
- Submitting all material to the lender.
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