Mortgage Broker Bond – Everything to Know About Mortgage Brokers and Mortgage Broker’s Bond
With the mortgage market becoming increasingly more competitive, the roles of this kind of brokers have become more important than ever. In fact, nearly 63% of all the mortgages approved by a creditor or financial institution in the United States have been made possible by the presence of a finance dealer. Today, there are over 53,000 different adviser companies distributed all over the country to provide the general public the assistance that they need in order to complete application course of action and, hopefully, approved.
Role of the Agent
Finance brokers are independent individuals that serve as the middle men between a financial institution or creditor and a possible borrower in order to provide assistance to the borrower when he or she takes out a loan. At the same time, brokers assist financial institutions in order to promote their various finance packages and loan programs to the general public.
In a sense, brokers can be viewed as affiliate marketers and sales people on the part of the financial institution. This is because one of the dominant responsibilities of a financial agent is to attract clients who would be interested to take out a bond with a particular creditor or financial institution. It is also the responsibility of the negotiator to do the initial screening and evaluation of the possible client of the financial institution in terms of his or her eligibility to take a loan for the amount that he or she is applying for. From here, the dealer would then provide the borrower a list of possible packages programs and loans that he or she is eligible for. Once the borrower has chosen the program he or she would like to apply for, the negotiator is then responsible for getting the pre-approval of the application in behalf of the borrower. It is also the responsibility of the agent to collect all the necessary paperwork and ensure that the borrower has completed all of these to be sent to the financial institution or creditor in order for the loan being applied for. On top of this, it is the responsibility of the credit advisor to explain all the various legalities in order to make sure that the borrower clearly understands the terms and conditions of the loan that he or she is applying for.
The Importance of Mortgage Broker Bonds
Although there are numerous states and federal laws governing the transactions processed by agent, there are nevertheless some instances where certain fraudulent and predatory credit lending occurs. It is for this reason that bonds have been implemented in order to prevent financial institutions to incur losses brought about by non-payments on the part of the borrower or due to fraudulent transactions practiced by some brokerage companies.
A bond is a kind of surety bond which is basically a contract involving three parties. In the case of a bond, this involves the agent, the company that the credit advisor is currently employed in and the financial institution that is to release the loan to a client. This kind of bond is applicable in the event when a non-payment occurs on the part of the client who had taken out a loan with the help of financial agent. If, for any reason that the non-payment has been credited to the failure of the finance advisor to complete his or her responsibilities based on the contract signed as part of the bond, then the financial institution can turn to the mortgage broker’s bond in order to get the payment for the noticeable balance. This would then be paid by the agent’s company in behalf of the advisor who facilitated the application.