5 steps to finding a good broker
Mortgage brokers can provide helpful financing services because they have relationships with multiple lenders and banks. Get a description in writing of the exact program being offered. Because many people who go to brokers are getting specialized mortgages that may not be as straightforward as 30-year fixed-rate loans, it's especially important to know what you want and know if that's what you're being offered. That way, you can compare rates, fees and points on an apples-to-apples basis.
Make sure you get a detailed good-faith estimate and check that against your final bill before closing. Brokers are sometimes paid by both the lenders who underwrite the mortgages and the consumers who get them, and it's important to look at the documents to make sure the broker isn't getting paid too much or double-charging you.
Rate locks from a broker can be a big trip-up if you're not careful. Get proof in the form of a signed document that the lock has been executed if that's what you want to do. Keep in mind this usually has to take place during business hours for the lock to be effective that day. Missed faxes or other snafus can delay the transaction and leave you with a higher rate if you're not on top of things. Think referral, referral, and referral when it's time to find a broker. It's good to have a broker who's nice; it's better to get rates and costs that are reasonable. Visit Lenders Nationwide to get additional information from companies listed in the Lenders Nationwide Mortgage Directory.
Consider checking to see if your broker or mortgage brokerage has faced state regulatory sanctions in the past. Most states maintain some kind of list of people and companies who have been fined or had their licenses revoked.
Mortgage and Real Estate Fraud on the Rise
Real estate fraud is the country's fastest-growing white-collar crime, according to the Federal Bureau of Investigation. Industry losses were at least $606 million last year, reports the Mortgage Bankers Association. And the Treasury Department’s suspicious-activity reports are up 35 percent this year. The Internal Revenue Service’s criminal case numbers in mortgage fraud have been doubling every two years through the first half of this decade.
According to The Christian Science Monitor, In more than 80 percent of the cases, scammers are helped by an insider, the FBI says. The crimes are complex and investigators sometimes have difficulty figuring out who’s guilty. For instance in a recent case, the perpetrators turned out to be senior citizens in Alabama who had approved ploys to inflate their incomes in order to invest in real estate. "It’s gotten to the point where it’s hard to figure out who the actual victims are," says Linda Finley, a civil attorney in Atlanta who prosecutes fraud cases. Officials are calling for a national lenders’ clearinghouse and more federal regulation.