Posted on: 03rd Feb, 2010 08:53 am
I am in the process of completing a mortgage application and have been working with a broker. He has locked in a rate for me through his company's in-house bank. I asked him for the name of the bank so I could research it and he said, "I don't know yet which of our in-house banks will take on the loan." That's fine but he didn't explain himself well. How do I know that his company's in-house bank won't go out of business within the year amidst the financial crisis if he can't give me a name? Does being affiliated with a large brokerage company provide me with better odds for the bank not being a dud? He also said that even if a bank does go out of business, my mortgage rate and payments won't be altered and I won't face ANY additional fees or payments as my mortgage is sold to another bank. Is that true?
Hi baker,
It is true that you won't be able to know whether or not the bank is going through a financial crisis if the broker does not provide you with the name. However, as far as I know, you won't face any additional fees or payments if your mortgage is sold to another bank. It would not be your fault if your bank goes out of business. Thus, they won't charge you any extra fees.
Thanks
It is true that you won't be able to know whether or not the bank is going through a financial crisis if the broker does not provide you with the name. However, as far as I know, you won't face any additional fees or payments if your mortgage is sold to another bank. It would not be your fault if your bank goes out of business. Thus, they won't charge you any extra fees.
Thanks
being affiliated with a mortgage broker has no bearing on whether a bank is a "dud" or not. banks fail, not very often, but the loans granted by these banks don't disappear, nor are they poorly granted simply because of the bank's inability to maintain. you're dealing with a broker here who has many options and they are, presumably, looking out for your best interests as well as their own. they want to get paid and they want to give you as good a loan as they can so that you'll come back again and again, and also supply referrals to them. that's only good business - who they sell the loan to really won't make much difference to anyone other than the bank that buys it.
If your "broker" is a mortgage broker, he knows the bank.
If he is a mortgage "banker" (and you are just calling him a broker), he may or may not know the bank.
A broker locks with a specific lender.
A banker closes with their own funds and sells the loan after closing. Since sold after closing, they may not know to which lender/bank.
As long as you close, you do not really care if a bank is going to go bust or not. Your terms never change and someone takes over the servicing. I guess it could mess up your escrows and escrow payments if not trnasferred to the new servicer.
Aftre closing, the lender can sell your loan (servicing rights) anytime. So as much checking as you may do up front, you can not control who it may be sold to and who they may sell it too etec etce etce
If he is a mortgage "banker" (and you are just calling him a broker), he may or may not know the bank.
A broker locks with a specific lender.
A banker closes with their own funds and sells the loan after closing. Since sold after closing, they may not know to which lender/bank.
As long as you close, you do not really care if a bank is going to go bust or not. Your terms never change and someone takes over the servicing. I guess it could mess up your escrows and escrow payments if not trnasferred to the new servicer.
Aftre closing, the lender can sell your loan (servicing rights) anytime. So as much checking as you may do up front, you can not control who it may be sold to and who they may sell it too etec etce etce
you're right john...it makes not a whit of a difference other than escrows can be thrown into a confused mess on occasion. generally, however, transfers from one lender to another (or servicer to servicer) are seamless with no effect whatsoever on a borrower.
This guy John above seems to know what he is doing and gives good advice that I've been able to read so far on this blog.
Consumer, you are fine. The reason the broker is avoiding telling you the lender is for fear you may try and circumvent him, jump ship and go with another broker using his lender source.
Many dishonest client will try this tactic. Buyers are liers and it's getting even worse, so stay honest, don't stress him out by asking who the lender is and all will be fine.
Consumer, you are fine. The reason the broker is avoiding telling you the lender is for fear you may try and circumvent him, jump ship and go with another broker using his lender source.
Many dishonest client will try this tactic. Buyers are liers and it's getting even worse, so stay honest, don't stress him out by asking who the lender is and all will be fine.
I do not share who the lender is with my client until after I register the loan with that lender. That protects me from having the client or another broker originate that loan with that particular lender.
