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Mortgage Broker - Broker Banks: Does Your Mortgage Broker Have a Dirty Little Secret Is your mortgage broker a particular actual broker, or simply a bank pretending to be a mortgage broker? Banks exploit a very large loophole in mortgage disclosure laws including frequently masquerade as mortgage brokers on the side. Here are several reasons you need to avoid Broker Banks including expensive mistakes you need to avoid. The Real Estate Settlement Procedures Act (RESPA) protects homeowners in the United States by establishing requirements for disclosing mortgage lender markup including fees. at the time the bill was making its way through Congress, the Banking Lobby spent millions of dollars lobbying Congress to be excluded from the legislation. at the time RESPA became law, the Banks were exempt. the means Banks are not required to disclose how much they mark up your mortgage interest rate, including the reason you should never take out a mortgage loan from your Bank. Why will you even think regarding taking out a mortgage from someone that doesn’t have to play by the rules? Broker Banks exist to take advantage pertaining to the same loopholes enjoyed by the banks. These Broker Banks are nearly indistinguishable from a normal mortgage broker except for 1 thing. Just like a Bank, Broker Banks fund their mortgage loans with their own dollars instead of reselling loans from a wholesale mortgage lender. Because the Broker Bank funds your mortgage with their own money, they close on the loan in their own name. Aside from the fact that Banks including Broker Banks do not have to disclose how much they mark up your mortgage interest rate, why else should you never consider borrowing from a Bank or Broker Bank? Banks including Broker Banks routinely charge Service Release Premium with their mortgage loans. Service Release Premium is the markup of your mortgage interest rate to make additional profit at the time your mortgage is sold on the secondary market. The Bank knows the wholesale mortgage interest rate you qualify for including marks the rate up to boost their profit margins. Because Banks including Broker Banks are exempt from RESPA laws, they might do the without telling anyone. You might learn more regarding your mortgage options, including costly mistakes to avoid with a free, 6 part mortgage refinancing video tutorial.
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