From “Mortgage Brokers: Friends or Foes?” in the Wall Street Journal:
The National Association of Mortgage Brokers, the main nationwide trade group for brokers, argues that brokers work neither for consumers nor for lenders.
Aha. If the mortgage broker worked for the borrower, they’d have to make sure he got the best deal. If they worked for the lender, they’d bear some responsibility to the creditor, say that under the circumstances at the time of the closing, the borrower was able to meet the mortgage obligations. But that would mean they’d actually be required to care whether the deal made any sense. That’s hard, and bad for business. So they are just out for themselves. Glad we got that clear.
Pray tell, how do mortgage brokers (remember, this was an industry organization, not some local yokel) think this legal netherworld works? Taking compensation creates legal obligations, at a minimum to good faith and fair dealing. But no, the mortgage brokerage industry wants them to function in an alternative universe where they can collect revenues with no obligation beyond connecting borrowers and lenders.
