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Should You Use a Mortgage Broker?

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Real Estate Broker/Owner

*******This post was written very early this morning and I can see from the comments my intent was not clear enough. I did not mean to bash mortgage brokers.  I have worked over the years with many and some are wonderful.   Nor was it my intention to imply that  real estate brokers are more ethical than a mortgage broker certainly we have our bad apples as well.  I do see how this is being interpreted but it was not my intention.  I would love if some of the mortgage brokers on this site could explain to me, or all of us, how this works, is there any oversight or transparency or is this left up to the individual.  What is the transparency and how do you get paid?  *************

 

After all the mortgage fraud, foreclosures and Countrywide did you know that if you go to a mortgage broker he is not bound to work in the best interests of the Borrower?  He may work in the best interests of the buyer but is not bound to in writting there is no disclosure form at least in New York State.  It's is hard to believe but there you have it.  Senator Schumer of New York has for several years tried to make fiduciary a part of the mortgage brokers role - but so far it is not.  

Real Estate Agents/Salespeople and Brokers are required to take a fiduciary role with their clients and work in their clients best interests, but Mortgage Brokers do not.  Mortgage brokers do have a Code of Ethics. You can review the Real Estate Agency Disclosure Form for New York State, here.

From the New York Times:

 "Chase won't lend to brokers' clients anymore.   The PMI Group, one of the biggest companies in the mortgage insurance  business, flat out refuses to underwrite any policies on loans that started with a broker.

Mortgage brokers work for themselves, not for you.  That is not to say that there aren't truly wonderful and ethical hard working mortgage brokers but there is no transparency in terms of who they work for. They do not provide a personal shopping service and may compare only a handful of lenders on your behalf. If you want to be sure you're getting the best rate and the lowest costs, the only way to come close to succeeding is to hunt extensively on your own."

Some of the best advice about what to do and how to do it is in this article from the New York Times yesterday, to read more, here.

 

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New Orleans Property Lady, LLC

Broker/Owner and REALTOR (r) 

New Orleans, LA 70125

504-908-2268 (C)            

 Licensed in the State of Louisiana, USA

New Orleans Property Lady 
           

  

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Copyright 2012, Miriam Bernstein, All Rights Reserved

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Miriam Bernstei
Rochester, NY

Janice, thanks.  Discussion is good.  Unfortuneatly quite a few people here felt that making this subject public is not a good thing and went off topic.  Appalling some of the comments.  Mostly though some good information.

Apr 09, 2009 11:47 PM
Darin Osenberg
Funky Quail Vintage - Nashville, TN

Hello Miriam!

Two QUICK suggestions:   Deep River-  You have great things to say!  CREATE a profile!  Heck, send me an email to Darin@osmwi.com   and I WILL send you an invite to join AR!   You should be blogging!  You are taking SO MUCH TIME to help and do these things, YOU should be getting credit foir it!  You are being VERY technical, and many times, people will not understand what you are talking about so try to keep your blogs a little shorter, and CREATE the debate as Miriam has done.  You will see when you join, depending on the TAGS and what CHANNEL you place your blog in, that there is a large difference of understanding!  I MADE THE ASSUMPTION that people in THIS BLOG channel would understand by now what DO< LP< and DU are.  However, I believe Miriam was ASKING ME TO DEFINE THEM for her readers!

Annette, Thank you.  You also should created a profile!  Again, send ME an email, and I will invite you!  It is VERY interesting to me that difference of opinion on BLOGGING and what you should or shouldnt say, and more importantly, how you APPROACH IT!

Miriam, NORMALLY i do give definitions of Acronyms!  Sorry!  For example, i did one of my very first blogs EVER in December of 2008, and had OTP in there!  I had over 55 Realtors NOT KNOW what an OTP was??  THAT was scary actually!

I WILL ALWAYS accept "LINK LOVE" miriam!  NO WORRIES!   EVEN when I disagree with everything a person has to say  (NOT YOU)...I will STILL accept link love!  Why?? Because it just goes to show what a large difference of opinion there is out there...and that teaching, training, and partnering ARE VERY VERY VERY VERY VERY VERY VERY VERY important today!

Word of caution, there are people that talk a big game, but are not even real producers!  Those really bug ME, and I can spot them on here in AR in a SECOND!  There is a recent blog out there that states FHA for example is now requiring 5% down since January 1, 2009.  THis person CLAIMS to be an FHA expert!  LOLOLOLOLOLOLOLOLOLOL.....I busted out laughing!  The group I belong to has a goal of calling people out like this...because MISINFORMATION and bad intel are our biggest adversaries right now!

The BLOG i was talking about was written by Janet Guilbault.  If you read down, you will see where I disagree with her QUITE A BIT!  However, again, it illustrates the large differences!

http://activerain.com/blogsview/983440/Why-Dont-Realtors-Have-FAITH-in-Preapproval-Letters-8-Questions-Every-Preapproval-Should-Answer

Here is a link to one of mine you might find interesting too!
Thanks again Miriam...and anytime I BLOG, I would love for you to share comments on mine as well!  I just did an open house one that you might like!

That goes for ANNETTE, DEEP RIVER< MARVIN, and anyone else from this blog!  These are good comments that need to be shared in more than one forum!

Here are mine:

http://activerain.com/blogsview/920077/Holding-Fellow-Lenders-to-a-higher-standard-Misinformation-is-the-leading-candidate-for-confusion

http://activerain.com/blogsview/828572/Trust-Cooperation-The-key-to-the-RealtorLender-Working-Relationship-in-Wisconsin

Thanks again!
D

Apr 10, 2009 05:05 AM
Miriam Bernstei
Rochester, NY

Darin, I already sent an invitation to Deep River.  He would be a tremendous asset to AR.  Hope he joins.  A post every once in a while would be great.  I will read your links now.  Thanks.

Apr 10, 2009 05:56 AM
Miriam Bernstei
Rochester, NY

Marvin, please post on the topic.  It is not that I don't get it, I don't agree with you.  A lot has been said in this comments and a lot has been learned.  I am entitled to my opinion as you are. 

Apr 10, 2009 07:33 AM
Miriam Bernstei
Rochester, NY

Marvin I want this to stay on topic.  Rise above and don't acknowledge whoever is bothering you as I will not allow this on this site.  Yes, it makes your profession look very bad.

Apr 10, 2009 10:57 PM
Miriam Bernstei
Rochester, NY

A follow up editorial from the New York Times,

 

http://www.nytimes.com/2009/04/10/opinion/10fri1.html

Apr 11, 2009 10:06 AM
Miriam Bernstei
Rochester, NY

In all my years as a Realtor I have never tried to persuade a buyer to pay more than they want to for a property.  Paul, some industries need to be cleaned up a bit.  The moon is made of green cheese-everything is just great the way it is.  Right?

Apr 11, 2009 10:50 AM
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

You need to use somebody, whether it is a mortgage broker or direct lender.  It's the person not the company.

Apr 11, 2009 04:58 PM
Miriam Bernstei
Rochester, NY

Steve I am sorry to hear of your troubles.  I hope you got to read the comments.  I think they are really informative.  I will say that there are many really fine and ethical mortgage brokers.  I have worked with many.  It is the few that spoil it for all. 

Apr 12, 2009 11:02 AM
Miriam Bernstei
Rochester, NY

Lorna, do you expect anyone to believe that it was Steve's fault.  That mortgage brokers have no responsibility in all this.....do you believe it yourself.  The consumer is not at fault.  They trust the mortgage person who is the professional.  They go to the mortgage person for advise and counsel because the mortgage person is in the business and should know more.  The consumer is not at fault.  Lorna there is some responsiblity on the part of the mortgage industry.  Too many people, too many defaults.  Not all mortgage brokers are doing the right thing.  Like in every industry.  The consumer is not at fault.

Apr 16, 2009 10:02 AM
Miriam Bernstei
Rochester, NY

Lorna, with all do respect to blame the consumer and to state that the mortgage brokerage process is perfect and there can be no blame  is ridiculous.  Yes, you knew the rate could go up but your professional mortgage person who does this for a living and knows more than you or I says don't worry you will be able to refinance.  Or, I didn't know to ask because I am new at this, never had a mortgage before.  You would be brain dean not to?  Or your language skills are not that great and there was no translator, or you think I understand but I really don't and am afraid to ask any questions and seem stupid, or they really don't explain everything as thorougly as you think.  Lorna I can't continue this if you really believe millions of members of the public are all wrong and that the mortgage brokers are perfect, not just some of them, but every single one of them at all time does the right.  They are all moral ethical all of them.  I am not down on the mortgage industry but I am certainly down on anyone who takes the stance you do. 

Apr 16, 2009 09:58 PM
Miriam Bernstei
Rochester, NY

Lorna, your personal attacks will not be tolerated.  If your view of things was strong or correct they would also not be necessary.  Your view that the public and everyone who took out a mortgage knew and this is all their fault is absurb.

Apr 20, 2009 10:15 PM
Dan Magstadt
Paramount Residential Mortgage Group, Inc - Lake City, FL

Wow, quite a discussion here Miriam!! I think everyone agrees that there are many good & some bad apples in the mortgage industry (Like all others).

Unfortunately, quite a few parties (lenders, brokers, consumers) made unwise choices due to the crazy market over the past couple years and now they are paying for those choices!

Apr 24, 2009 02:43 AM
Andrew Haslett
Van Warren Home Inspections, NAHI CRI - Fort Knox, KY
Heartland of Kentuckynulls, Best Home Inspector

Miriam, thanks for the topic. You certainly hit a nerve, as has been noted by many others that commented before me.

It is disappointing to read some of the comments that are not respectful.

Better, are the constructive comments, even if the writer disagrees. Disagreeing, but not being disagreeable.

Apr 24, 2009 04:02 AM
Richard Byron Smith, NMLS #184479
Mortgage Loan Officer, Fairway Independent Mortgage Corporation NMLS #2289 - Chattanooga, TN
Mortgage Loan Officer

True story.

A former client went to their direct lender and refinanced through their retail office. He expected a value of $180,000. The actual appraisal came in at $135,000. The retail loan officer explained that they needed to get another appraisal.

The LO then encouraged the client to close on a loan based on the higher value. Actually there never was an appraisal at the higher amount. They just closed on it anyway.

The client is upside down in his house by $35,000, without any market decline because the nice bank retail lender lied to him.

True story.

The HVCC policies are coming because of coercion between an actual lender and an appraisal management company.

It is a mistake to think that banks are more ethica, because they are banks.

Richard

Apr 24, 2009 09:51 AM
Miriam Bernstei
Rochester, NY

Richard, "a true story" told by who?  Was that the story the borrower told you, did you confirm it with the lender?  In my area I have never heard of a loan without an appraisal.  They just closed on it anyway????  No one thinks banks are more ethical, but I do think they are scrutinized to the gazoo now.

Apr 25, 2009 11:21 PM
Miriam Bernstei
Rochester, NY

Richard, "a true story" told by who?  Was that the story the borrower told you, did you confirm it with the lender?  In my area I have never heard of a loan without an appraisal.  They just closed on it anyway????  No one thinks banks are more ethical, but I do think they are scrutinized to the gazoo now.

Apr 25, 2009 11:21 PM
Miriam Bernstei
Rochester, NY

I never got a voice mail from you and would certainly have called you back.  I don't use the same mortgage brokers anymore because I changed areas and they don't work in my area anymore.  If you would like to repost your comment without anything personal that would be great.

May 11, 2009 06:55 AM
Darin Osenberg
Funky Quail Vintage - Nashville, TN

Okay!  Thanks..>Ill do that.

 

Darin

May 11, 2009 09:53 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

What's a Mortgage Broker?

May 14, 2009 05:41 AM
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