I have an agreement with a broker in Maryland to pay them 2% for a deal that I just closed. I however learned later that he had charged the lender 1.5%. I read somewhere that mortgage brokers cannot legally be paid by both the buyer and the lender. Is that correct?
Am I doing something wrong for writing this guy a check? The lender refused to put the broker's 2% on the HUD-1. Should I request a w-9 form?
Was this a commercial deal? Conventional loans do not use a HUD-1 anymore. And if it were commercial, then Dodd/Frank which dictates how mortgage brokers can be paid would not apply.
It was a single asset cash out refinance through Finance of America. I meant the closing/settlement sheet. The lender refused to add it as a line item. Thanks.
I just sent a message, but it really doesn't apply after getting all the information.
Your loan was not considered a "covered mortgage" and as such is not subject to Dodd/Frank. The broker should have had an agreement with you to pay however much you were going to pay prior to settlement. If the lender restricted them, as Finance of America does, then your part of the arrangement could have been settled separately.
Maryland law restricts mortgage brokers from charging borrower all kinds of fees, but on "covered mortgages". When it's on a single asset, non-owner occupied property, it's like the wild wild west.