2011 a defining year for brokers
January 10, 2012
If I were to conduct a survey on rating 2011, my guess is most would give it a big zero. With the housing market still central to the sluggish economy, last year was certainly difficult. However, I believe that the challenges mortgage brokers and consumers faced brought new beginnings with regard to transparency, lending practices and consumer protection.
There were many changes in 2011 as to the way mortgage brokers worked. Rules got tough on ethics and disclosures, and as a result, many brokers left their independent business to join banking institutions. Why? Because the new laws don’t apply to banks. It’s much easier to conceal hidden fees rather than to tediously document every piece of information, which brokers must now do. Hidden fees imposed on consumers result in rebates for the banks, which they don’t need to divulge.
With regard to banks’ exemptions to the disclosure regulations, I discussed this in a previous blog, “Mum’s the word at banks.” It’s also important to know that a bank’s loan agent doesn’t need to tell consumers how much their compensation is for the loan and that they are paid regardless whether or not the loan closes. This inhibits you from shopping for the best rate and program suited for your individual needs.
Since the stricter disclosure rules apply only to brokers, it’s understandable why so many took the easier path by joining a bank. For those of us left in the field, we have risen to the top of our game. Last year brought the unique opportunity for us to demonstrate our depth of knowledge and expertise in the lending industry. Unlike the bank, we don’t get paid until the transaction is closed, which motivates us to be more responsive to you and ensure your needs are met on every level.
Additionally, last year brought historic low interest rates plus an array of new, never-seen-before programs for purchasing and refinancing. Low and zero-down payments, Down Payment assistance programs, better refinancing programs (check out last month’s blog on the new HARP), new VA assistance program and there’s more to come. 2011 allowed us to be of better service to you, and we are excited about the possibilities that 2012 holds for working and helping you.
