Mortgage Brokers Seek Level Playing Field – Broker news from MortgageDaily.com
DALLAS, July 17 /PRNewswire/ Mortgage brokers would like the same loan disclosure rules as their mortgage banking counterparts, according to testimony covered by MortgageDaily.com, the dominant source of online mortgage news.
“Unfortunately, the approved disclosure documents for rate, fees, costs and points can be confusing and overburdened with legalese,” a National Association of Mortgage Brokers representative reportedly testified to the Federal Reserve Bank. “Until there is a uniform way to disclose costs and everyone is fully transparent about their fees, it will continue to be difficult for consumers to comparison shop in a meaningful way.”
Unlike mortgage bankers, brokers are required to disclose yield spread premiums — fees paid by wholesale lenders for loans with above market interest rates.
But mortgage bankers say some distinction must be drawn between the two types of originators.
“There are many functional differences between [brokers and lenders] and how they relate to borrowers, such that borrowers should get disclosures from brokers and not lenders,” counsel for the Mortgage Bankers Association told MortgageDaily.com, adding the group agrees with HUD’s position “that when brokers arrange loans, any fee from the lender should be disclosed.”
And accusations against a California mortgage broker make the brokers’ cause more difficult. The total fraud involved in his case could “be as large as $50 million,” a Santa Clara police detective told MortgageDaily.com. Many of his hundreds of victims were elderly investors.
In another case, a Missouri broker operated a Ponzi scheme — defrauding investors out of more than $3 million, according to a lawsuit filed by a group of investors. He allegedly neglected to advise investors, one who put up $300,000, his company was under federal investigation for fraud.
In conference calls with investors, according to the complaint, he “guaranteed” that if something should happen to prevent investments form paying off, he would see that everyone would receive their funds back, adding at one point, “I’ve got more money than all of your families put together; I will guarantee you will get your money back.”
Read complete mortgage broker news at https://www.mortgagedaily.com/Brokers.asp
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Source:Â MortgageDaily.com
