Mortgage Brokerages

Question 1

3. Discuss the role of a mortgage broker in a real estate transaction.

Answer 1

know these

Question 2

Mortgage Loan Officer

Answer 2

-Speaks to client
-Qualifies the client
-Walks the client through the process from qualifying to closing
-educator to your client
Have a good source of people to do business with

Question 3

Where can you get a mortgage?

Answer 3

Mortgage Sources:

• Commercial Lender
• Savings and Loans
• Credit Union
• Mortgage Banker
• Mortgage Broker

Question 4

Who is getting your mortgage?

Answer 4

Mortgage Loan Officer

Question 5

Mortgage Banker

Answer 5

A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages.

• has the ability to lend out their own funds, has a line of credit
• Can also act as a mortgage broker
• paid by the lender/borrower
• Needs to be licensed

Question 6

Mortgage Broker

Answer 6

An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. A mortgage broker gathers paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval. The mortgage funds are then lent in the name of the mortgage lender. A mortgage broker collects an origination fee and/or yield spread premium from the lender as compensation for its services.

• 3rd Party, Don’t use their own funds, no line of credit
• Needs to be licensed

Question 7

Mortgage Loan Originator (MLO)

Answer 7

all the people that work for the broker or bankers

Question 8

Pre-approval

Answer 8

An evaluation of a potential borrower by a lender that determines whether the borrower qualifies for a loan from the lender, or the maximum amount that the lender would be willing to lend.

• 80% of loan application + checked client’s credit + property address to be determined
• Where the value comes in, better than pre-qualification.
• commitment letter

Question 9

Pre-Qualification

Answer 9

A process whereby a loan officer takes information from a borrower and makes a tentative assessment of how much the lending institution is willing to lend them.

• preliminary conversation + piece of paper
• Want to get them pre-qualified before you show them houses

Question 10

Mortgage Approval Steps

Answer 10

1. Pre-qualification
2. Pre-approval
3. Commitment Letter

Question 11

As a Salesperson

Answer 11

You should work to keep proper communication between the various parties open in an effort to help move the process along

Question 12

When to Lock in a Rate?

Answer 12

-A client should NOT lock in a rate before first finding a home to purchase

Question 13

Who Pays the Mortgage Brokers and Bankers?

Answer 13

get paid by the banks. all disclosed in Good Faith Estimate

Question 14

Good Faith Estimate

Answer 14

Referred to as a GFE, must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act

• prepared by loan officer
• within 3 business days of receiving loan application

Question 15

Pre-application and Fee Agreement

Answer 15

A form used between mortgage brokers or mortgage bankers and a home buyer that provides certain disclosures prior to the application of a mortgage.

Question 16

Loan Package

Answer 16

• Loan Application (Form 1003)
• Pre-application & Fee Agreement

(If you are serving as both loan officer and a salesperson in a transaction, you must disclose this to your client and have them sign a Dual Agency Disclosure Agreement)

Question 17

Mortgage Broker Dual Agency Disclosure Form

Answer 17

A banking department form required when a person is acting as a mortgage broker and a real estate broker in the same transaction.

Question 18

Mortgage Commitment

Answer 18

A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.

Question 19

Lender Rebate

Answer 19

A payment to a mortgage broker by a lender.

Question 20

Non-conforming Loan

Answer 20

A loan that fails to meet bank criteria for funding.

Abby is trying to obtain a non-conforming loan. Who should you recommend Abby contact to better her chances of obtaining the loan? –> Mortgage Broker

Question 21

Underwriting

Answer 21

The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.

Question 22

Underwriting

Answer 22

The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.