Seattle mortgage broker adopts U.K. model

Part 2: Differences between U.K., U.S. mortgage brokers

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(This is Part 2 of a two-part series. Read Part 1, "Transparency is king in U.K. mortgage system.") Last week I noted that the pricing of mortgage broker services in the United Kingdom was much more transparent than in the United States. As a result, the U.K. system provides no leeway for brokers to price opportunistically, meaning to vary the price according to what the borrower can be persuaded to pay. In the U.S., however, opportunistic pricing is pervasive and average broker fees are much higher. The regulation of mortgage brokers also is very different. In the U.K., a series of sweeping changes beginning in 1997 placed most financial regulation under a new Financial Services Authority (FSA). FSA is an independent nongovernmental body but it is answerable to the Treasury and ultimately to the Parliament. In 2004, the FSA took over regulation of the mortgage sector, including mortgage brokers. Mortgage brokers in the U.K. are thus subject to one set of rules, ...