What is the purpose of a mortgage broker/lender?
What is the purpose of a mortgage broker? Are there any hidden fees to working with one? Should I do my own shopping to find the best rates or should I seek the advise from a broker ?
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We pull, and can offer the consumer, better rates than if the consumer called the lender directly.
Many lenders and mortgage banks have both a retail (consumer calls/meets with an employee directly, the bank/lender must bankroll all the time wasting) and a wholesale division (volume based, the broker's job is to do all the stuff that consumes time and resources).
An entire trolling campaign happened a few years ago surrounding this, it was 2018 when rates had just reached a 7 year high. In 2018, the retail and wholesale gap was also larger than it seems to be today.
Note that the words banker and broker look very similar, since there's only 2 letters different, but are different words, and both are the same height when lowercase. Don't read hyperfast, or this trolling flier will not make sense. Knowing that banker and broker aren't the same thing (& that you don't have to be at a big bank to be a banker) makes you smarter than some Realtors out there. :P
In the state of California, mortgage brokers are also fiduciaries. In general, mortgage bankers and direct lenders are not. Note that this guy only got in trouble specifically because he had pretended to be a broker, had he not done that it would have been lawful and allowable for him to pick the higher interest rate option for that particular consumer because it paid him more.