There are so many things the Average Joe doesn’t know about the mortgage business.
One is that bank mortgage reps often get paid more for selling higher rates—as do many brokers.
Another is that banks sometimes direct borrowers to outside lenders that the bank has financial relationships with. This happens when the bank chooses not to service the applicant directly (due to qualification issues or an inability to meet the customer’s expectations).
Both of these issues entail potential conflicts and disclosure problems, but banking regulators don’t monitor these matters as closely as you’d think. That was the topic in this week’s Globe column: That story
The article linked to above examines concerns in the banks’ retail mortgage channels. On March 4, we’ll take an honest look at conflicts in the broker market.
Such articles will undoubtedly annoy certain stakeholders, but the conflicts they expose rarely apply to bank reps and brokers who take their fiduciary obligations seriously. Those are individuals who never fear an informed consumer.
Rob McLister, CMT