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Mortgage Broker in Michigan

Posted by  on Apr 16, 2009
 
Mortgage brokers can be very helpful if you are thinking about buying a home in Michigan. Michigan mortgage brokers are able to help with Michigan mortgage loan, Michigan mortgage rates and Michigan refinancing. Michigan mortgage brokers are helpful if you are attempting to increase your finances. Some experts say Michigan mortgage brokers are helpful because they have access to mortgage programs from more than one originator. Other experts say mortgage brokers just add another layer of fees to the process, and their commissions can provide incentives to steer borrowers toward loans that are less than optimal.

In regards to the issue of fees, it is important to point out brokers often do much of the work involved in processing an application, so their fees do not necessarily increase the total cost of originating the loan.

Keep in mind that there is no general rule that says you always will do better with one type of lender than another. What you should care about are costs fit of loan program to your needs, experience, and integrity. Regarding the latter, look for a clear explanation of when your loan will be approved and what it will cost.

The investor in your mortgage is the institution that supplies the funds for your loan. The originator of your mortgage is the institution that handles the loan from application through closing. Mortgage bankers typically originate and service loans, but the funding comes from other investors.

Additionally, mortgage bankers will forward monthly payments to agencies that often act as conduits, pooling your mortgage with similar mortgages which are sold to large banks, insurance companies, and pension funds.

Mortgage brokers typically originate loans, but servicing is performed by mortgage bankers and funding comes from investors. Several years ago, there were very few banks or large institutions willing to act as investors in mortgages for people with bad credit. Some mortgage brokers specialized in finding investors in such mortgages. Today, there are many more investors, including traditional banks and savings and loans, willing to invest in higher-risk mortgages.

Also, you should keep in mind that the distinction of mortgage brokers as specialists in such loans is fading. Mortgage bankers and banks are not subject to this cost reduction act. Because the selling of loans generates most lender fees, servicing the total in most cases exceeds the high cost act. Whereas mortgage brokers now must reduce their fees, a licensed lender is unaffected by the second portion of fee generation. This is due to the delay of selling the servicing until after closing.

Additionally, predatory lending runs unregulated in the mortgage services industry. Consumers are often victims of predatory lending according to CNN. The main concern is that mortgage brokers and lenders whilst operating legally, are dishonestly finding loopholes in the law to obtain additional profit.

The main culprit is a little known fee called Yield spread premium, which is a cash rebate wholesale lenders pay to brokers for charging a borrower a higher interest rate than they qualify for. Keep in mind that if Michigan interest rates drop and the portfolio has a higher average interest rate, the banker can sell the loans at a larger profit based on the difference in the current market rate.

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