Residential Mortgage Broker acts as an intermediary who sells mortgage loans on behalf of individuals or various businesses.
Today as the markets for mortgages have become more competitive; the role of the Mortgage Banker has become more popular. Residential Mortgage Broker does this role in a very effective manner.
The Mortgage Bankers are regulated to ensure compliance with banking or finance laws in the jurisdiction of the consumer; the extent of the regulation depends on the jurisdiction.
The Banks’ activities can be divided into retail banking, business banking, providing services to mid-market business; corporate banking, private banking and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises and some are owned by government, or are non-profits organizations.
The nature and scope of a Mortgage Banker’s activities varies with jurisdiction. The Mortgage Banker in many cases is responsible for ensuring the advice that is appropriate for the borrowers’ circumstances and is held financially liable if the advice is later shown to be defective. In other jurisdictions, 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.
The Residential Mortgage Broker is different from a loan officer as he works as a conduit between the buyer and the lender, whereas, the loan officer typically works directly for the lender. Most states require the mortgage broker has to be licensed. A mortgage broker is registered with the state, and is personally held liable for any fraud done. Residential Mortgage Broker understands well his legal, moral, and professional responsibilities as well as liabilities to prevent fraud and fully disclose of loan terms to both consumer and the lender.
Potential clients can compare a lender’s loan terms to those of others through advertisements or through internet quotes. A large segment of the mortgage finance industries are commission based.
The laws have improved a lot in the favor of consumers. A Mortgage Banker must comply with standards set by law to charge a fee to a borrower. The fees must be the combined rate and costs may not exceed a lower percentage, without being deemed a High Cost Mortgage.