Question:

Mortgage Broker Definition

Answer:

A mortgage broker acts as an intermediary between borrowers and lenders, finding the most appropriate loan products for his customers. Mortgage brokers are not supposed to originate, assess or service the loan but some of them will write the loan under their name as if they are a lender.

A mortgage broker is supposed to collect borrowers application and submit it to the lender for approval. The application is then underwritten and funds are extended to the borrower in the name of the lender. The mortgage broker will charge a broker's fee for his services.

A mortgage broker that has gained experience may choose to become a correspondent direct lender by registering as a lender and getting a warehouse line of credit. However, many brokers would not meet the initial income and audit requirements, especially if their practices have involved predatory lending.

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