Why is there a stigma on Mortgage Brokers?

Question

I'm a very hard working, honest mortgage broker for NC, MD and PA. But, there is a natural stigma against brokers. I understand there is always a "bad seed", which is the case in ANY field. Most times, a broker is the best option for a refinance, since we can shop MANY lenders guidelines to find the right loan. Whereas a lender only has their guidelines - you fit it or they turn you down. Please help me understand this, from your experience.

Answer 1

Brokers make most of their commission on costs AND they also have to charge the lender's fees. People just pay attention to that and don't care that our rates are usually quite a bit better.

We also deal with a lot of sub-prime and Alt A, which can be pretty tough to close.

Stay honest and prove to your clients that you're a good guy!

Oh, and to
ckhhuff24...

Have you ever worked in this field? You should know that working with home finances is one of the most stressful careers out there. You try dealing with clients like yourself that call 5x a day wanting updates while the loan is with underwriting, or clients that blame you because theire credit is low so they're getting a high rate, or others that blame you when the appraisal comes in lower that what your client estimated their home to be valued!!!

Answer 2

I took or refinanced a mortgage 7 times in the last 6 years and every time I was able to find a better deal through a broker, not a direct lender. I believe most brokers are OK to do business with.

I think the "stigma" you are talking about arises from a simple fact that the purpose of any broker is to make money, and the source of this money is your client, one way or another. Its the only way it can be, but many many people are not ready to accept it. And, on top of that, a broker can always take advantage of an inexperienced buyer, and many of them do.

My advice would be to try being as strait as possible with your clients. Let them see that you are making on their mortgage less than other brokers and direct lenders do. That you are not wasting their money on advertising, nice office or numerous assistants. That the kind of broker I go to.

Good luck

Answer 3

Face it.Like used carsalesmen the info offered is not usually factual.For instance a fixed rate is usually posted or advertised yet when it comes to brass tacks the rate is ridiculously available to those with perfect credit.No such person exists in the real world and you know it.Another trick frequently pulled is stalling the loan so a gher rate of interest is charged.Of all the brokers and banks I talked to all were equally deceiving.When I finally thought I'd found an honest broker,I had to play hardball to get what was initially offered me.Entirely the process now is way too much BS .I also find tactics are used wholesale which were deemed unethical in the past.I've been around for a while and had more than a few mortgages.I pity the person going in to this maelstrom for the first time.either you're naive or new to the business.

Answer 4

i guess its the same in the US as in GB but i think that the reason is because here in the uk the brokers never fully package the mortgages, they take thier time and drag things out to make more money. When an underwriter asks for Proof of residence, id and proof of income they seem to send them in seperatly, yes this may be down to the client but why not hold on to them untill all the information is collected. the brokers know exactly what is required when the case is agreed in principle as there is normally a list of requirements, u know that the bank statements have to be the most upto date so why send older ones asking if they are ok?

i know that your only doing your job, but the fact that you charge the customers so much, and get a a payment from the company for introducing the mortgage (which i might add not all customers know about) then we get annoyed, yes i agree its a very good job, infact id like to get my Cmap qualification.

also when you ay about customers calling 5 times or more a day chasing a decision... u then do the same to the company and they have set timescales they cant do it any quicker but the brokers (here in the uk certainly...) demand that they put thier clients to the top of the queue of processing.

i dont mean to sound rude if i do, i apologise but thats the reasons most people have a problem with brokers

Answer 5

Many of them are not honest, and nickel and dime the customer to death with hidden charges. One of them quoted me a certain interest rate, and at the closing gave me documents to sign that had a higher rate. My other house was sold, I had to sign.

Answer 6

they are not doing any constructive work. they are like a middleman or a pig-in-the-middle. some call them pimps. mine used to call me 3-4 times a day, and them i had to tell them i dont want their services.
i am sure good honest ones provide a good service.

Answer 7

you guys make way too much commission for what you do. you all act like its soooooooooo damn hard to do what you do. Yo a paper pusher for gosh sake. GET OVER IT