Mortgage Brokerages Flashcards
- Discuss the role of a mortgage broker in a real estate transaction.
know these
Mortgage Loan Officer
-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
Where can you get a mortgage?
Mortgage Sources:
- Commercial Lender
- Savings and Loans
- Credit Union
- Mortgage Banker
- Mortgage Broker
Who is getting your mortgage?
Mortgage Loan Officer
Mortgage Banker
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
Mortgage Broker
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
Mortgage Loan Originator (MLO)
all the people that work for the broker or bankers
Pre-approval
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
Pre-Qualification
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
Mortgage Approval Steps
- Pre-qualification
- Pre-approval
- Commitment Letter
As a Salesperson
You should work to keep proper communication between the various parties open in an effort to help move the process along
When to Lock in a Rate?
-A client should NOT lock in a rate before first finding a home to purchase
Who Pays the Mortgage Brokers and Bankers?
get paid by the banks. all disclosed in Good Faith Estimate
Good Faith Estimate
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
Pre-application and Fee Agreement
A form used between mortgage brokers or mortgage bankers and a home buyer that provides certain disclosures prior to the application of a mortgage.
Loan Package
- 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)
Mortgage Broker Dual Agency Disclosure Form
A banking department form required when a person is acting as a mortgage broker and a real estate broker in the same transaction.
Mortgage Commitment
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.
Lender Rebate
A payment to a mortgage broker by a lender.
Non-conforming Loan
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
Underwriting
The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.
Underwriting
The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.
