Getting your loan from a broker? Think again
Mortgage brokers have come to dominate the mortgage-lending industry in recent years. And they did so by wielding a powerful sales tool: Brokers claimed that they scoured mortgage sources to make sure that the homebuyers they worked with nabbed the lowest-cost mortgage loan possible.
Turns out that this claim may not be true.
A study for the Department of Housing and Urban Development, found that loans prepared by mortgage brokers more often came with higher fees than did those loans arranged directly by lenders.
The study, though, is not without controversy. For one thing — and this is a serious flaw — it relied on data from 2001. The executive vice president of the National Association of Mortgage Brokers is right to call this information “stale.”
Still, it does raise serious doubts about the chief claim to fame of mortgage brokers. It also raises a big question: If brokers really don’t provide the cheapest mortgage loans, what’s the point of working with one?
Tags: brokers, Housing and Urban Development, HUD, National Association of Mortgage BrokersRelated Stories
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