How Are Mortgage Brokers Regulated?
Like any financial industry, mortgage brokerages are regulated
by the government to make sure they do not take advantage of consumers.
While is it reassuring to know this protection is in place, always
insist on doing business with a licensed mortgage broker.
Specific details about how mortgage loan brokers are regulated
vary from state to state. In some states, the regulation is overseen
by the State Banking Department, in others by the Department of
Finances, and in some by the Department of Consumer and Human
Affairs. Certain states have specific requirements in place in
order for mortgage loan brokers to obtain a license. These requirements
can include a minimum net worth, a surety bond, education and
experience prerequisites, a passing grade on an exam or personal/business
references. However, some states, such as Kansas, do not have
The fact that mortgage brokers are not regulated on the federal
level, there is a greater potential abuse. For example, a broker
may try to do business in another state after he has been disciplined
or warned in another.
In general, however, a licensed mortgage broker with good standing
in their community is interested only in making successful partnerships
between lenders and consumers. Because his or her business is
often based on word of mouth, it is in a broker’s best interest
to make customers happy and continue to enjoy the positive regard
of the public.
If you feel you have been the victim of a fraudulent or unscrupulous
mortgage broker, contact your state’s regulatory agency
immediately. Make sure to provide them with a comprehensive statement
about exactly what happened and when, and include any documentation