February 7th, 2017 12:10 PM by Gregg Mower
A mortgage Broker in in today’s world has been dramatically redefined from just a decade ago. A decade ago there were no real rules for a Mortgage Broker. There was no licensing, no Consumer Finance Protection Bureau (CFPB), no Loan Estimate forms, no Closing Disclosures, no TRID (Truth in lending integrated RESPA disclosure) and no underwriting regulation, and no real accountability. All these additions to the Mortgage Brokering industry over a decade is a lot to swallow. What that means to a consumer is simple, more red tape to wade through when applying for a home loan. Is this regulation good for the industry, the consumer? In many ways it is but in many ways it is not. And what about loan programs that a Mortgage Broker has to offer in today’s world? Well those are limited as well.
A Mortgage Broker a decade ago had no licensing requirements to go through to become a Mortgage Broker. One day you were a shoe salesman and the next a Mortgage Broker. That has all changed with licensing and the National Mortgage Licensing System (NMLS). You will notice that all Mortgage Brokers now will have to post their license number on all of their marketing material and advertisements. You will see MAE Capital’s at the bottom of this page and if you look up our staff you will see all Loan officers will have their NMLS number posted prominently so you can check them out, if you so desire. My opinion of licensing is a positive one as it makes the field I have chosen to be my career for the last 32 years more professional and accountable. This single one change has kept the riff raff out of the Mortgage Broker business for the last 7 years and I believe that to be positive.
An individual Loan Officer now has a choice where they wish to work or more specifically what regulator they would like to be under. What this means is that a Licensed Mortgage Originator may also possess a California Real Estate License and with both a NMLS and a Real Estate License they now have a choice of where they could to work. If a Loan Officer holds both licenses they can work for a Broker like MAE Capital Real Estate and Loan where we are regulated the California Bureau of Real Estate (BRE) allowing our firm to offer both Real Estate Services as well as Mortgage Brokering services. Having both licensing makes an individual Loan Officer more well-rounded in the information they have of the industry. I would argue that one could only be a Mortgage Broker if they were licensed under the BRE. The other licensing a Loan Officer could have would be one under the California Department of Business Oversight (DBO). Under this regulator, a Loan Officer can only originate loans even if they possess a BRE license they still could not act as a Real Estate Broker. An individual Loan Officer working for a company regulated by the DBO does not have the ability to “Broker” loans to other companies like a BRE regulated loan officer. Not having the ability to look at a multitude of companies to deliver loans to limits a Loan Officer to only offering products that their specific company can offer. A Loan Officer under the BRE with both licenses can look to hundreds of different sources of money across the nation to fulfill their customer’s needs. MAE Capital Real Estate and Loan is a true Mortgage Broker in that we offer products from different companies all across the nation and we can offer Real Estate services.
A Decade ago a client would go to a Mortgage Broker for a loan and they had no idea who they were talking with and if the person they were talking with could be trusted. A Mortgage Broker today has to account to the NMLS their activities every quarter. This means that a Mortgage Broker must know where their business is coming from and certain tracking items must be in every file. A decade ago a Mortgage Broker was not limited in the commissions they could make on a transaction. Today a BRE Mortgage Broker cannot make more than 3% total on an owner-occupied loan transaction and the commission cannot be tied to the interest rate at all. If you go to Loan officer that is licensed under the DBO you don’t know how much money that company is making off your transaction as they do not have to play by the same rules as those of us regulated by the BRE. The disclosures are different when you deal with a true Mortgage Broker like MAE Capital as we must show you, the consumer, more information than a DBO Loan Officer. We provide you with a Mortgage Loan Disclosure Statement form as well as the Loan Estimate, both show you what we make and what the costs of the transaction are to you so you know where every dollar is going.
As a Mortgage Broker for the last 7 years with these new regulations it has been tough to have to tell my clients that they will have to work harder to get a loan than ever before. This is where we all have hope in the industry that the new administration will fix those things that need fixing to help consumers be able to get financing easier. I am not talking about the recklessness that was the Mortgage Crisis but rather, I am talking about common sense things. Currently if you are self-employed it is nearly impossible for you to get a home loan the way things are today with having to verify every little bit of a person’s income before they will be granted a loan. It just makes sense to view individuals differently based on their jobs, their education, their credit and their ability to be able to deal with it all. I know some of you reading this think that we are all created equally and that is true on the rights we enjoy but it is not true in the way we chose to lead our lives. Those that are entrepreneurial should not be discriminated against because their tax returns don’t show enough income in the right areas to qualify for a home loan, these people should be looked at in different ways than someone who works a salary at a State job. As a Mortgage Broker we have found companies that can help these folks but these companies are under fire from the CFPB for not playing by the rules they created. So hopefully this new administration can bring back some make-sense underwriting criteria and loosen up the rules for people to be able to purchase Real Estate. As a Mortgage Broker in California we are here to find new and innovating ways to serve our customers.
As a Mortgage Broker licensed under the BRE a Mortgage Broker has more loan program options to offer clients. The loan products we have to offer as a Mortgage Broker ranges from conventional FNMA and FHLMC loans, FHA, VA, CalHFA, USDA, to Alternative loans like Bank statement only and W2 only programs for owner occupied loans. It becomes real interesting when we see start talking about the options we have for investors buying investment property. An investor can choose whether they need short term funds or long term funds, from a qualifying mortgage with low interest rates to no qualifying loans with higher interest rates. Private Money or Hard Money, as it is otherwise known as, is also an option we have for investors that want to take property under an LLC and may not have a track record a Bank will require or the credit score a bank will require. We can fund land, and commercial property as well as single and multifamily homes with private funds. A Loan Officer working for a company that is under the DBO as their regulator does not have this ability.
MAE Capital Real Estate and Loan is a Mortgage Broker and a Real Estate Brokerage firm allowing us to bundle our services and provide better deals for clients. With all the laws and regulations that we must comply with, we sincerely hope that you will use our Mortgage Brokerage services as well as our Real Estate services and for doing so we will work to lower your overall costs and we will purchase a home warranty for you, so when you move in to a house you know if there are any problems it will be covered by the warranty for the first year. We look forward to assisting you with your Mortgage and your Real Estate needs. We can lend all over the great state of California and our Real Estate area would be Sacramento and Placer counties. Call us today for information on Pre-Approval and free home searches or go directly to the site for more information at www.maecapital.com or call at 916-672-6130.