What information/services should a mortgage broker provide?

Question

Are they responsible for the good faith estimate and truth in housing documents? If so, when are they to be provided? What other documents should they be providing?

Our broker asked us to prepay the appraisal. My experience has been it normally is paid when the loan closes? Is it typical to pay for it upfront?

Also, I have heard that a broker cannot legally provide a pre-approval letter that it must come directly from the lender. Is this correct?

Answer 1

If you did not receive a GFE (good faith estimate) and TIL (truth in lending) then your broker has violated RESPA and that is a huge fine. I would recommend working with someone else now before you close and see astronomical closing costs. They should have been provided within 3 business days of pulling your credit. The appraisal issue now that is not uncommon as if the loan does not close then the loan officer is responsible for the fee. Your are correct as the lender is the only one who can give a pre-approval but your loan officer can issue a pre-qualification and that is determined by pulling your credit and analyzing your debt, income and credit scores. I hope this helps you and answers your questions but if you have any further questions or need any assistance feel free to email me.

Answer 2

The Good Faith Estimate should be given at the earliest opportunity, usually within a few days of having all the information needed to make an educated guess as to your expenses. Sometimes that isn't until nearer closing than borrowers like, but some properties have tax situations that can be confusing.

The Truth in Lending comes at closing. It shows you the effect of prepaid items. It's a very scary form, but if you read the line above where you sign it, all the signature means is that you've seen it and been given a copy. You should have it explained to you, but it doesn't contain any promises on your part, so it's really not the most important document you see at closing.

The appraisal is usually paid for up front. That fee goes to someone outside of the Lender's control, and they want their money whether it closes or not, so to keep from being on the hook for it on loans that don't close, the borrower pays it up front and it isn't refundable.

The broker can provide a pre-approval letter, there's nothing illegal about it, but it doesn't carry the weight that a similar letter from a Lender has. They can write it, and you can show it to a prospective Buyer, but a smart Seller will recognize that one says "we as Broker are of the opinion that someone would lend them money" but the other says "we as a lender would lend them money."

A letter from a Broker doesn't impress Buyers much and it's legal but generally pointless.

Only a real Lender can issue a bona fide Mortgage Commitment, which is far more specific and binding.

Answer 3

The broker is responsible for a good faith estimate, truth in lending, and all disclosures in the beginning when the file is being submitted. Many lenders allow this to be signed at escrow but you certainly can request them.

Appraisals are normally paid for by the borrower at the time of the appraisal...it is your appraisal...you pay for it. I do cover appraisals for my past clients but it is not customary to expect a broker to pay these costs and assume you will close escrow.

Pre-approval letters can be legally drafted by a broker. Unfortunately, many brokers issue them prior to actually getting an approval from the lender. In this case they should be issuing a pre-qualified letter...not a pre-approval.

For more information on mortgage qualifying and credit maintenance check out my blog.

Answer 4

many brokers do ask ou to pay for the appraisal upfront so they aren;t stuck with the cost if you back out. A GFE & TIL are provided w/ your mortgage application as they can not start the process with the lender without your signature on it. Take it upon yourself to copy everything you sign. As for the pre-approval letter - yes and no. I wouldn't worry about it too much though, b/c they wouldn't put a pre-app together for you with out already knowing what you can/can't afford. Also the real estate agent will accept it anyway. If you'd like additiona l information with no obligation to you, contact my old company www.terrafinancialgroup.com or call Susan at 215-676-8844. They're awesome people & will help you with whatever you need. They are licensed in PA, NJ, CA< MD, NY and maybe a few others - I don't know - I haven't worked there in a while

Answer 5

On the appraisal my lender just took a credit card number to hold until closing. They will charge me in the event the loan does not close.

Answer 6

I worked with a broker in Pennsylvania. The company was called Drake Mortgage. Christina was my point of contact. She did a fabulous job for me. I always felt at ease and my questions were always answered. You can reach her at 800-339-4747. The company has been in business for over 20 years. I hear that it is unusual for a broker to be in business that long. If you are looking for a mortgage in Pennsylvania ...... give her a call.

Answer 7

i might shop around. in the event that they could provide you a sturdy deal than definite. Take the supply you get and spot who will attempt to beat them. Banks and loan companies will compete on your employer employer. you may negotiate with them basically such as you may with the cost of the residing house. the place i'm authorized any cost this is made purchase each and every individual to the genuine property agent it has to bypass in the process the broker provider and be disclosed. otherwise this is seen a relax and is against the regulation.

Answer 8

Go here http://www.realestateformnm.com/ResearchLink.html prepare a pot of coffee and see all that has to be looked at and provided.