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The easy answer is that it is less expensive to use a mortgage broker than a bank. Nationwide, our fees and rates are far less.
Cost alone does not give mortgage brokers such a clear advantage, though. Brokers' access to many different lenders and their ability to offer a huge variety of mortgage options likely is the primary reason for the large share of the mortgage market.
If consumers started and ended their search at a bank that has a limited product line, they may be turned down for a loan and left out of the opportunities available with homeownership. Mortgage brokers, on the other hand, consider borrowers' specific circumstances to place them with a lender that offers the type of loan needed.
Another reason for mortgage-broker dominance in the lending industry lies in the relationships we form with our clients. Taking a loan application and closing a loan can be a near commodity, but brokers who know borrowers and their needs, wants and concerns will almost always develop strong relationships.
Brokers are the most-regulated originators in the mortgage industry. Most states require them to take and pass a state-issued test, to complete pre- and post-education classes, and to register with the state oversight board.
These hefty requirements have not prohibited those who would do wrong from entering the industry, however. There are bad actors at banks, lenders and even in the mortgage-brokerage business.
By being a part of the National Association of Mortgage Brokers (NAMB) and your state mortgage brokers' association, you can help dispel clients' worries about working with these bad actors. Broker-association members agree to adhere to a higher level of consumer protections. All broker members have agreed to be bound by the strict code of ethics that comes with being a member.
Also, this past November, NAMB introduced the Lending Integrity Seal of Approval. This will further help consumers differentiate between members and all other loan originators. You can learn more about the program, NAMB and your state's mortgage-broker association online at namb.org.
Consumers have many choices when it comes to their home-financing needs. The question you can help them answer is: Who is most capable of providing them with maximum choice based on their personal circumstances? By presenting the benefits of working with a mortgage broker, their answer will be clear.
D. Ritch Workman is president
of the Florida Association of Mortgage Brokers, a 4,000-member organization, and is the co-owner of Workman Mortgage Co., based in Melbourne, Fla. Workman has more than 15 years' experience in the mortgage industry and has been a member of FAMB for 11 years. Workman is a certified residential mortgage specialist (CRMS) and serves as an expert witness in mortgage-related cases. He can be reached at (321) 255-5367 or firstname.lastname@example.org.
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