Legislators to Mortgage Brokers: Put Customers First
Mortgage brokers are coming under increased scrutiny as home mortgage defaults rise.
Some legislators are seeking to impose a fiduciary duty on brokers to put their customers' interests first, as lawyers, real estate professionals, and financial planners generally are required to do with their clients. But many mortgage brokers are opposed to this idea.
"The mortgage broker does not represent the borrower," says Chris Holbert, president of the Colorado Mortgage Lenders Association. "We sell access to money."
Brokers are involved in originating about 60 percent of all home loans, according to Wholesale Access, a research firm in Columbia, Md.
When choosing a broker, borrower should ask tough questions. Among them: In searching for loans, do you feel obliged to put my interests ahead of yours? Exactly how much will you earn on this loan? And how many lenders do you check regularly for rates and terms?
Source: The Wall Street Journal, James R. Hagerty (05/24/07)