Mortgage Broker

A professional that helps consumers through the loan selection, processing and closing of a mortgage loan. Most mortgage brokers have access to a wide range of mortgage products through many mortgage lenders. Mortgage brokers are paid a fee by the borrower when a suitable mortgage is found and closed.

Mortgage Broker Refinancing - What are Broker Banks & Why You Should Avoid Them

If you are in the process of mortgage refinancing, choosing the wrong lender can be a costly mistake. If you are considering refinancing with a Mortgage Broker, you need to make sure that person is not a Broker Bank. Here is what you need to know about Mortgage Broker Banks to avoid overpaying for your next mortgage loan.

A Broker Bank is simply a bank masquerading as a Mortgage Broker. Broker banks are nearly indistinguishable from traditional Mortgage Brokers except for one important thing. Before signing an agreement you need to ensure that person is actually a Mortgage Broker and not working for a bank. Banks exploit a loophole in disclosure laws are not required to disclose profit margins on their loans.

Banks are exempt from the Real Estate Settlement Procedures Act, which protects borrowers from predatory lending practices in the Untied States. The banking industry spent millions of dollars lobbying to be excluded from this legislation. Banks routinely exploit this loophole to overcharge their customers for mortgage refinancing. Here’s how your bank overcharges you for a mortgage loan.

When you apply for mortgage loan the lender qualifies you for a specific interest rate based on a number of factors. Your banker knows the interest rate you will qualify for from any wholesale lender; however, the bank marks up your interest rate because they will receive a premium for overcharging you. The bank is not required to tell you about this markup because they are exempt from all disclosure laws. Banks routinely sell mortgage loans on the secondary market to boost their profits; the more the bank overcharges you, the more the loan is worth on the secondary market.

How can you tell if your Mortgage Broker is actually a bank? Ask if the company closes in their own name. If the answer to your question is “yes,” then you know it’s actually a bank you’re dealing with. You can learn more about mortgage refinancing while avoiding costly mistakes by registering for a free mortgage guidebook.


To get your free mortgage guidebook visit using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit

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