Consumers > Frequently Asked Questions

Why should I choose a mortgage professional?

Studies show over 50% of Americans use mortgage professionals for financing. Professionals provide consumers with choice, convenience and experience. The consumer receives an expert mentor through the complex mortgage lending process. The mortgage professional offers the consumer extensive choices and access to affordable home loans while balancing the consumer's financial interests and goals.

Frequently Asked Questions about credit score

Frequently Asked Questions

What is a prescreened offer of credit or insurance?

A firm offer of credit or insurance is defined as any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on the consumer's credit report, to meet the specific criteria used to select the consumer for the offer, subject to certain confirmation requirements.

TOP

What is opt-out?

Opting-Out refers to the process of removing your name from lists supplied by the Consumer Credit Reporting Companies, Equifax, Experian, Innovis and TransUnion ("Credit Bureaus"), to be used for firm (pre-appoved/prescreened) offers of credit or insurance. Your rights as a consumer under the Fair Credit Reporting Act include the right to "Opt-Out" for 5 years or permanently.

TOP

How do I opt-out?

You can opt-out by visiting www.optoutprescreen.com or through the toll-free telephone number, 1-888-5-OPT-OUT. When you call or visit the website, you'll be asked to provide personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.

TOP

Does exercising my right to opt-out affect my ability to apply for credit or insurance?

No, removing your name from these lists does not affect your ability to apply for or obtain credit or insurance.

TOP

Does opting-out improve my credit score?

No, since inquiries for firm offers for credit or insurance are not used in calculating credit scores, Opting-Out does not improve your credit score. Similarly, inquiries for firm offers for credit or insurance do not reduce your credit score.

TOP

How do I contact the FTC?

Federal Trade Commission
Consumer Response Center
Room 130
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
www.ftc.gov/credit/

TOP

I just switched from retail to the wholesale side of the mortgage business. What is the best way to gain access to a list of members in the Metro Baltimore area? Is membership required?

A directory of members is published each year and distributed exclusively to other members. For information on membership, please visit www.MAMP.org. As a wholesaler lender, you are eligible for Affiliate Membership.

TOP

May Brokers charge a separate fee for either in-house or third-party processing?

If a processing fee is charged, it should be included on the HUD settlement statement. The part of your question that needs some explanation is that you called it "a third-party processing fee." Under Maryland law a broker may collect as broker fee (called "finder's fee" in Maryland law) an amount up to 8% of the loan, and all broker fees must be set forth in a written agreement signed by both the broker at the borrower within 10 days of "initial application." (What constitutes "initial application" is a very long discussion not addressed here.) In my opinion, a processing fee charged by a broker is nothing more or less than broker fee (and this is true whether the processing fee is paid over to a third party or is retained by the broker). Processing is a part of the work that a broker should be performing; it is part of the broker's job for which the broker has a right to collect a fee. If the broker decides to hire a third party to perform this work, that is likely acceptable, but it is still broker work and any payment charged for processing is broker fee. Thus, while I believe a broker may include a processing fee on the HUD settlement statement, it must be treated as broker fee regardless of who actually receives payment for the processing services.

TOP

Does the mortgage broker really care about the quality of the loan itself?

Yes, absolutely. The safety and soundness of the mortgage lending community is directly linked to the success and integrity of its home loan originations. Furthermore, mortgage brokers represent the single largest residential origination source today, emphasizing that they play a significant role in the mortgage loan process. These numbers highlight the fact that consumers who exercise their choice, choose mortgage brokers; most likely because brokers are dedicated to their customers: consumers, wholesale lenders, and ultimately, American tax-payers.

TOP

Do brokers work for the lender they are selling my loan to or me, the consumer?

Neither. As an independent contractor, the broker allows wholesaler lenders to cut origination costs by providing such services as preparing the borrower's loan package, loan application, funding process, and counseling the borrower. Brokers help keep loan rates low due to their minimal overhead and setup costs. Furthermore, the broker will seek the loan which best suits the borrower's financial circumstances, needs, and goals. From the consumer perspective, with rare exception, the broker does not get paid unless and until the loan closes. Thus, the broker has the ultimate incentive to provide the best possible customer service to the consumer.

TOP

Isn't the broker supposed to get the best deal for the consumer?

Since mortgage brokers offer the products of many wholesale lenders they often have the best selection. This question presumes that anyone can know what is "the best deal". While many would consider "the best deal" to mean "the lowest rate," a loan program with a very low interest rate may not be the best choice for a consumer with limited cash, if that rate comes with high points and fees. A 15-year loan may save a borrower tens of thousands of dollars in interest payments over a 30-year loan, but the higher monthly payments may not be acceptable to the consumer. So, "the best deal" for any consumer depends on his or her individual circumstances, needs, and goals.

Today over half the nation's mortgages are originated by mortgage brokers. This clearly indicates that consumers are choosing the superior options, service, and expertise offered by mortgage brokers. Brokers have forced retail lenders to compete with other loan sources driving down costs nationwide.

TOP

Don't brokers "steer" consumers to the lenders who pay the highest fees to the broker?

While isolated instances of adverse steering can occur, the mortgage brokerage industry has predominantly armed consumers with a free-market economy weapon: open and vigorous competition. Any consumer exercising his or her basic right to shop and compare, will ultimately find the loan options that are in his best interests. The combination of government-mandated disclosures and vigorous competition has presented today's consumer with unprecedented levels of choice. While price is an important consideration in advocating a specific wholesale lender, brokers also make their professional recommendations based on a number of other factors which include the lender's:

1) reputation for service
2) underwriting criteria
3) ability to close the loan on time
4) compliance with consumer's requirements

TOP

MAMP would like to thank our Platinum Elite Partner
Shumaker
MAMP would like to thank our Gold Elite Partner
MAMP would like to thank our Silver Elite Partner

 

 

720 Light St., Baltimore, MD 21230
TEL: (410) 752-6262 | FAX: (410) 752-8295

EMAIL: MAMP@assnhqtrs.com