Mortgage Brokers: Friends or Foes?

Mortgage Brokers: Friends or Foes?

 

The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me?

 

Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way.  They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients.

 

That doesn't mean consumers should shun all brokers.  Many provide good service and can help people sort through the complexities of choosing a loan.  Consumers don't necessarily get a better deal by going directly to lenders, which also can charge excessive rates and fees.

 

The National Association of Mortgage Brokers, the main nationwide trade group for brokers, argues that brokers work neither for consumers nor for lenders.

 

For consumers, even shopping around can be difficult.  With different combinations of fees and terms, it's hard to compare one loan to another.  And the exact level of fees may not be apparent until the borrower is at the closing table, when it may be too late to seek a better deal elsewhere.

 

Have you closed on a mortgage loan and found surprises at the closing table?  We'd love to hear your experiences, (good or bad).  Leave your comment below.