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 TMG Finance is proudly committed to being an Upfront Mortgage Broker
Differences between an Upfront Mortgage Broker and a conventional Mortgage Broker
- Upfront Mortgage Brokers disclose their fees to customers in advance and in writing. Upfront Mortgage Brokers disclose the wholesale prices (rates and points) passed through from lenders.
In contrast, conventional mortgage brokers add a markup to the wholesale prices, and quote the resulting "retail prices" to customers. Mnay mortgage brokers will only reveal their markup in required disclosures after an application has been submitted.
- The Upfront Mortgage Brokers interests are fully aligned with those of customers.
In contrast, many conventional mortgage brokers shopping the market are often in a conflict situation with customers. For example:
- *The loan type that best meets the customer's needs may not be the one that allows the largest markup for the mortgage broker. All mortgage brokers are incentivized by the lender to provide higher rates in order to secure higher rebates for themselves.
- *Mortgage brokers may profit by ignoring customer requests to lock the rate/points, putting the customer at risk.
- *Mortgage brokers may increase their markup on customers who allow the rate/points to float by not giving them the best available rate (the float rate) when the loan is finally locked.
- Upfront Mortgage Brokers credit customers with any rebates they receive from third parties. Mortgage brokers sometimes receive rebates from lenders or concessions from home sellers. Upfront Mortgage Brokers credit customers for any such payments that would otherwise increase the broker's fee beyond what was agreed upon.
In contrast, mortgage brokers may or may not credit customers for payments from third parties, depending on the circumstances.
Dr. Jack Guttentag, The Mortgage Professor and author of the Upfront Mortgage Broker Commitment, publicly encourages all members of the mortgage industry to embrace the business practices of the Upfront Mortgage Broker. He has lots of excellent educational material at his Web site. To check it out click on his logo.
Upfront Mortgage Broker Links
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