AgentMortgage

Can mortgage broker protect against lender overcharges?

Borrowers should be wary of referral fees from third parties

Q: If I deal with a mortgage broker, can I depend on the broker to protect me against overcharges by all the other players in the transaction? Yes, no, maybe. Sorry about the ambiguity, but the answer depends on the source of the charge, on the type of transaction, and on the operating practices of the individual broker. Dealing with a broker does protect you against excessive fixed-dollar fees by retail lenders. Some retail lenders have a bad habit of increasing their fees and finding new ones after borrowers have committed themselves, but this doesn't happen when a broker is involved. The fixed-dollar fees charged by the wholesale lenders that brokers deal with are known to the broker, who will inform the borrower as soon as the lender has been identified. These fees will not change unless the deal or the lender changes. There is no way that brokers can benefit from allowing lenders to charge their clients excessive fees. Some brokers even guarantee the lender's fee, meaning that t...

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