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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 such requirements.

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 available.

 
 
     
   
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