OpinionIndustry News

The meaning of fiduciary duty

Guest perspective: Mortgage industry at a crossroads

The president of the National Association of Mortgage Brokers made a speech before Congress on March 27, arguing that "NAMB remains opposed to any proposed law, regulation or other measure that attempts to impose a fiduciary duty, in any fashion, upon a mortgage broker or any other originator." NAMB's president goes on to explain why he thinks mortgage brokers "should not, and cannot, owe a fiduciary duty to a borrower."  He makes the following argument: "The consumer is the decision-maker, not the mortgage broker. Mortgage brokers do not represent every loan product available in the marketplace, nor do we have the 'best' loan available. Rather, the mortgage broker enters into contracts with various lenders and is then able to offer such lenders' loan products directly to the consumer. This is a critical point because there is no 'best' result. What is 'best' depends upon three inter-related concepts: product availability, price and service. Focusing solely on a price of a produc...