There is a movement in residential mortgage lending back to mortgage brokerage. The word is getting out that mortgage brokers have access to many different wholesale lenders and can offer wholesale rates and costs.
However, I have noticed a trend of loan originators who are calling themselves mortgage brokers, but they are not mortgage brokers. Rather, they are mortgage bankers and work for a banker, not a broker. They may say they can also broker loans, but they typically bank the loan as they are usually incentivized to keep the loan in house.
So, how can you determine if you are truly working with a mortgage broker?
You should ask the originator in whose name the loan documents will be drawn at closing. If the loan documents will be drawn in the name of the originator’s company, then you are likely working with a banker. If the loan documents will be drawn in the name of a company other than the originator’s, then you are likely working with a broker.
For example, if you are working with a loan originator from ABC Mortgage, and the loan docs at closing show ABC Mortgage as the lender, then you are working with a banker. However, if your originator is from Counsel Mortgage, and the loan docs show ABC Mortgage, then you know the loan was brokered to ABC Mortgage.
Do not be misled by your originator. Ask them if they are going to bank the loan. If they are, then you know they did not shop the loan, rather they are offering you only their rates and costs, which may not be competitive.
Counsel Mortgage is a mortgage broker. We work for the customer, and shop the lenders.
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