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Consumers
> Frequently Asked Questions
 Why
should I choose a mortgage professional?
Studies
show over 50% of Americans use mortgage professionals
for financing. Professionals provide consumers with
choice, convenience and experience. The
consumer receives an expert mentor through the
complex mortgage lending process. The mortgage professional offers
the consumer extensive choices and access to affordable
home loans while balancing the consumer's financial
interests and goals.
Frequently Asked Questions about credit score
Frequently Asked Questions
What
is a prescreened offer of credit or insurance?
A
firm offer of credit or insurance is defined as
any offer of credit or insurance to a consumer
that will be honored if the consumer is determined,
based on the consumer's credit report, to meet
the specific criteria used to select the consumer
for the offer, subject to certain confirmation
requirements.
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What
is opt-out?
Opting-Out
refers to the process of removing your name from
lists supplied by the Consumer Credit Reporting
Companies, Equifax, Experian, Innovis and TransUnion
("Credit Bureaus"), to be used for firm
(pre-appoved/prescreened) offers of credit or
insurance. Your rights as a consumer under the
Fair Credit Reporting Act include the right to
"Opt-Out" for 5 years or permanently.
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How
do I opt-out?
You
can opt-out by visiting www.optoutprescreen.com
or through the toll-free telephone number, 1-888-5-OPT-OUT.
When you call or visit the website, you'll be
asked to provide personal information, including
your home telephone number, name, Social Security
number, and date of birth. The information you
provide is confidential and will be used only
to process your request to opt out.
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Does
exercising my right to opt-out affect my ability
to apply for credit or insurance?
No, removing your name from
these lists does not affect your ability to apply
for or obtain credit or insurance.
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Does
opting-out improve my credit score?
No, since inquiries for firm
offers for credit or insurance are not used in
calculating credit scores, Opting-Out does not
improve your credit score. Similarly, inquiries
for firm offers for credit or insurance do not
reduce your credit score.
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How
do I contact the FTC?
Federal Trade Commission
Consumer Response Center
Room 130
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
www.ftc.gov/credit/
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I
just switched from retail to the wholesale side
of the mortgage business. What is the best way
to gain access to a list of members in the Metro
Baltimore area? Is membership required?
A directory of members is published
each year and distributed exclusively to other
members. For information on membership, please
visit www.MAMP.org.
As a wholesaler lender, you are eligible for Affiliate
Membership.
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May
Brokers charge a separate fee for either in-house
or third-party processing?
If a processing fee is charged,
it should be included on the HUD settlement statement.
The part of your question that needs some explanation
is that you called it "a third-party processing
fee." Under Maryland law a broker may collect
as broker fee (called "finder's fee"
in Maryland law) an amount up to 8% of the loan,
and all broker fees must be set forth in a written
agreement signed by both the broker at the borrower
within 10 days of "initial application."
(What constitutes "initial application"
is a very long discussion not addressed here.)
In my opinion, a processing fee charged by a broker
is nothing more or less than broker fee (and this
is true whether the processing fee is paid over
to a third party or is retained by the broker).
Processing is a part of the work that a broker
should be performing; it is part of the broker's
job for which the broker has a right to collect
a fee. If the broker decides to hire a third party
to perform this work, that is likely acceptable,
but it is still broker work and any payment charged
for processing is broker fee. Thus, while I believe
a broker may include a processing fee on the HUD
settlement statement, it must be treated as broker
fee regardless of who actually receives payment
for the processing services.
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Does
the mortgage broker really care about the quality
of the loan itself?
Yes,
absolutely. The safety and soundness of the
mortgage lending community is directly linked
to the success and integrity of its home loan
originations. Furthermore, mortgage brokers
represent the single largest residential origination
source today, emphasizing that they play a significant
role in the mortgage loan process. These numbers
highlight the fact that consumers who exercise
their choice, choose mortgage brokers; most
likely because brokers are dedicated to their
customers: consumers, wholesale lenders, and
ultimately, American tax-payers.
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Do
brokers work for the lender they are selling my
loan to or me, the consumer?
Neither.
As an independent contractor, the broker allows
wholesaler lenders to cut origination costs
by providing such services as preparing the
borrower's loan package, loan application, funding
process, and counseling the borrower. Brokers
help keep loan rates low due to their minimal
overhead and setup costs. Furthermore, the broker
will seek the loan which best suits the borrower's
financial circumstances, needs, and goals. From
the consumer perspective, with rare exception,
the broker does not get paid unless and until
the loan closes. Thus, the broker has the ultimate
incentive to provide the best possible customer
service to the consumer.
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Isn't
the broker supposed to get the best deal for the
consumer?
Since
mortgage brokers offer the products of many
wholesale lenders they often have the best selection.
This question presumes that anyone can know
what is "the best deal". While many would consider
"the best deal" to mean "the lowest rate," a
loan program with a very low interest rate may
not be the best choice for a consumer with limited
cash, if that rate comes with high points and
fees. A 15-year loan may save a borrower tens
of thousands of dollars in interest payments
over a 30-year loan, but the higher monthly
payments may not be acceptable to the consumer.
So, "the best deal" for any consumer depends
on his or her individual circumstances, needs,
and goals.
Today
over half the nation's mortgages are originated
by mortgage brokers. This clearly indicates
that consumers are choosing the superior options,
service, and expertise offered by mortgage brokers.
Brokers have forced retail lenders to compete
with other loan sources driving down costs nationwide.
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Don't
brokers "steer" consumers to the lenders who pay
the highest fees to the broker?
While
isolated instances of adverse steering can
occur, the mortgage brokerage industry has
predominantly armed consumers with a free-market
economy weapon: open and vigorous competition.
Any consumer exercising his or her basic right
to shop and compare, will ultimately find
the loan options that are in his best interests.
The combination of government-mandated disclosures
and vigorous competition has presented today's
consumer with unprecedented levels of choice.
While price is an important consideration
in advocating a specific wholesale lender,
brokers also make their professional recommendations
based on a number of other factors which include
the lender's:
1)..reputation
for service
2)..underwriting
criteria
3)..ability to
close the loan on time
4)..compliance
with consumer's requirements
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720
Light St., Baltimore, MD 21230
TEL: (410) 752-6262 | FAX: (410) 752-8295
EMAIL: MAMP@assnhqtrs.com
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