How to Find An Honest Mortgage Broker

By:
JR Hevron - MortgageLoan.com
This April Fool’s Day, learn to find an honest mortgage broker so that the trick isn’t on you at the closing.
 
If you’ve ever shopped for a mortgage, you might have had a sinking feeling that not everything was right about the transaction. “Before I became a mortgage broker, I had purchased two homes," says Marcy Wolf, a Houston-based mortgage broker with Action Mortgage. “I certainly felt like there were games being played and fees I didn’t know about. Once I got into the industry, I realized that I really had been getting screwed.”
 
Marcy is currently a member of the Upfront Mortgage Brokers Association (UMBA), a group that was formed in 2006 by Jack Guttentag, a professor at the Wharton School of Business. Member brokers follow six tenets that represent a true commitment to work in the best interests of the consumer.
 
“I was actually an engineer in my previously life, and realized that I didn’t want to switch to a career where I would feel like a used car salesman,” says Wolf. “So, I did some research to find an ethical approach to being a broker where I could feel like I was protecting the consumer.”
 
While it is not necessary to use a UMBA member broker to have a good mortgage experience, much can be learned in exploring the difference in approach between a typical broker and a UMBA broker. One of the biggest differences is that a UMBA broker will put all of their fees up front and in writing before the client agrees to work with them. This eliminates most of the suspect, miscellaneous or “junk fees” that are often tacked on at closing.
 
“An average broker can hide junk fees or blatantly put them on an estimate and say that they are legitimate fees,” explains Wolf. “A junk fee is just that, a way to pad the pocket of the mortgage broker. Putting all of your fees in writing up front eliminates things like $495 processing fees or $83 courier fees that are really just junk in this day and age. It also helps to eliminate the practice of steering clients towards a 4.25% rate rather than 4% rate because the broker will get paid more.”
 
Junk fees are not the only trick that brokers play on clients, but they are one of the most common. “Certainly, bait and switch schemes are out there,” says Wolf referring to the practice of luring clients in with low interest rates and promises that never materialize. “I feel really bad for those consumers!”
 
While there are obvious gains for the customers in terms of money saved, there are also advantages for the brokers that take this approach as well. “Of course, it helps me sleep at night,” says Wolf, “ but it also helps to build my business because the customer that walks away happy is more likely to refer his or her friends to me. I don’t have someone walking away from the table like I did when I bought my first house.”
 
“By putting the compensation out there first, I can go to the closing table and explain line by line what I’m getting paid and the fees,” says Wolf. “This way, everybody walks away understanding what’s going on and happy that they’ve understood the process.”
 

Start here to compare mortgage rates from top lenders in our network

More Houston Articles

Low Mortgage rates is our mission

Bringing the best rates on the market to
you is our primary focus. Fill the form to get a quote based on your conditions.
/Mortgageloan.com

SecureRights Policy

  • New Home

    Looking to get on the property ladder? Discover your spending power. Get a rate quote today.

  • Debt Consolidation

    Are your debt woes getting you down? Explore your options now by filling out our form.

  • Home Equity

    Is fluctuating home value a constant cause for concern? Our advice - take out a new loan today.

  • Mortgage Calculators

    Need help getting a grip on your expenses and finances. Try one of our 137 multipurpose calculators.

Call For Rates

800-419-1494

Speak to a lender now.

We will match calls to our toll free number with our network of lenders.

See Today's Rates

National Rates

Loan Type Today +/-
30 yr fixed 3.72
15 yr fixed 3.03
5/1 ARM 2.75

Rates may contain points

Compare Rates »

Browse Mortgage Rates

Mortgage Rates Calculators