Do Mortgage Brokers Represent Borrowers?
Wednesday April 25, 2007
For the most part, professionals engaged by a buyer in the home buying process represent the buyer. A real estate lawyer hired by a buyer represents the buyer. A real estate agent hired exclusively by the buyer represents the buyer. Even the insurance agent who writes the home buyer's home insurance represents the buyer to some extent. But the lender does not.
Think of it like going to Target. Red bulls-eyes everywhere. Clean aisles. Good selection and choices in merchandise. Customer hotline phones conveniently located. Cheerful stockers and check-out clerks. But Target is selling you a product. It does not represent you. But unlike Target, even with a receipt, you can't take your mortgage loan back to the mortgage broker for a refund if you are later dissatisfied.
Here's what you need to know about mortgage broker representation. The only person who can protect your interests is yourself.
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Comments
Good point – BUT – many, many consumers don’t want to read all the fine print, or have to think, or take responsibility. On Monday of this week an insurance rep told me that the courts have started allowing challenges to “batch document” signings. Supposedly if you sign and initial 20 pages of docs, your signature or initials don’t carry the same weight as when you sign a single doc.
That’s interesting. Although I haven’t heard about court challenges in this neck of the woods, it doesn’t astonish me. I tell buyers to have the loan docs reviewed by a lawyer; otherwise, just sign them. Check to make sure the property address is correct, their interest rate, payment schedule, their names are spelled correctly but the rest of it . . . if they don’t sign, they don’t get the loan. Which is all the more reason to work with a reputable lender in the first place. Because as real estate agents, we are not liable nor responsible for the buyer’s loan. In fact, the Department of Real Estate in CA just passed a ruling that says mortgage brokers are solely responsible for explaining loan documentation, not real estate agents.
Hey, great pot, very interesting, I’d have to agree with Elizabeth above…