MORTGAGE BROKER

A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses.

Traditionally, banks and other lending institutions have sold their own products. As markets for mortgages have become more competitive, however, the role of the mortgage broker has become more popular. In many developed mortgage markets today, mortgage brokers are the largest sellers of mortgage products for lenders.

Mortgage brokers exist to find a bank or a direct lender that will be willing to make specific loan an individual is seeking. Many mortgage brokers are regulated to assure compliance with banking and finance laws in the jurisdiction of the consumer. The extent of the regulation depends on the jurisdiction.

A mortgage broker is normally registered with the state, and is personally liable (punishable by revocation or prison) for fraud for the life of a loan. A loan officer works under the umbrella license of an institution, typically a bank or direct lender. Both positions have legal, moral, and professional responsibilities and obligations to prevent fraud and to fully disclose loan terms to both consumer and lender. Agents of mortgage brokers may refer to themselves as “loan officers”.

Mortgage brokers must also be licensed through the Nationwide Multi-State Licensing System and Registry (NMLS). The purpose of the NMLS is to improve and enhance mortgage industry supervision, create better communication from state to state, and to create consistency in licensing requirements and automate the licensing process to the greatest degree possible. Loan officers who work for a depository institution are required to be registered with the NMLS, but not licensed.

Typically, a mortgage broker will make more money per loan than a loan officer, but a loan officer can use the referral network available from the lending institution to sell more loans. There are mortgage brokers and loan officers at all levels of experience.

SOURCE: https://en.wikipedia.org/wiki/Mortgage_broker