"According to the National Mortgage News of July 9, 2007, 'Several Democratic senators want to impose a fiduciary duty on mortgage brokers so they are obliged to serve the best interests of the borrower and can be held accountable for violations of that trust.' I assume you support this effort?" I do. Brokers operating now as independent contractors can earn as much on transactions as they can induce borrowers to pay and have no obligation to deliver the mortgages best suited to borrowers' needs. As agents of the borrower, in contrast, broker fees will have to be reasonable and the mortgages they offer will have to meet borrowers' needs. At least, that's the theory. In practice, agency obligations defined as I just did are not enforceable and would accomplish nothing. California has had such an agency law for years; it has never been enforced and California brokers ignore it. The critical challenge is formulating agency rules that can be enforced at a reasonable cost per ...
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