Unit 12 Mortgage Brokerage
A mortgage broker is... - correct answer ✔✔is an individual or entity that is registered by the New York
State Banking Department with the ability to place, negotiate, solicit, and process residential or
commercial mortgage loans. These services are performed for a fee. The fee may be paid by the
borrower or the lender.
A mortgage broker will assist borrowers in obtaining financing necessary to conclude their transactions.
Mortgage brokers will arrange financing in the following types of real property transactions:
Acquisition
Gut renovation
Conversion
Construction/development
Refinancing of an existing mortgage on owned property
-Loan financing will fall into two primary categories of debt: debt financing and equity financing.
- a third party originator. They do not have a line of credit, they do not use their own funds to lend out a
mortgage.
- They cannot act as mortgage bankers! They bring the prospective borrower to the lender and get a fee
(like a commission) for it.
Real estate brokerage - correct answer ✔✔In residential and commercial real estate brokerage, a
transactional broker deals primarily with arranging terms of a purchase or lease transaction.
mortgage broker vs mortgage banker - correct answer ✔✔- Both mortgage brokers & bankers have to be
licensed and renew it every year. NMLS does their licensing.
-Mortgage brokers charge fees based on fee agreements, usually consisting of a percentage of the
borrowed amount or a flat fee. In a lending transaction, a fee agreement is a compensation agreement
that a borrower will enter into with a mortgage broker. In exchange, the mortgage broker assists the
borrower in the placement and origination of funds with a lender. The fee agreement normally occurs
simultaneously to that of the preapplication process (preapproval of the borrower). They introduce and
arrange financing (for qualified borrowers seeking financing) with willing lenders and also handle the
necessary loan application process.
, -A mortgage banker is an individual or entity that is licensed by the New York State Banking Department
with the ability to originate a loan to a qualified borrower or borrowers. Mortgage bankers utilize their
own funds, have their own line of credit, generally comprised of borrowed funds, to originate loans. Can
also act as a mortgage broker if they want to. Financing may be in the form of either short-term or long-
term loans.
Mortgage broker vs. banker cont'd - correct answer ✔✔to qualify for mortgage banker licensing, an
individual or entity must have:
-a net worth of not less than $250,000;
-an open line of credit of not less than $1,000,000 provided by an insurance company or institutional
bank;
-posting of a surety bond in an amount no less than $50,000;
-five previous years' experience in the business of originating residential loans;
-an honest and trustworthy character; and
-a current fingerprint card on file with the banking department in order to conduct a background check.
The license is issued with a one-year term for a fee of $1,000 per term.
When financing is funded on a long-term basis, these loans are subsequently sold to investors (in many
cases, insurance companies) that purchase these types of loans.
Where can one get a mortgage? - correct answer ✔✔-can go to a commercial lender, a savings and loan,
a credit union. They can go to a mortgage banker or a mortgage broker
- the key is to have a good relationship with a mortgage loan originator
cont'd - correct answer ✔✔-A pre-approval is needed to show commitment on the buyer and show that
he/she is financially qualified. Better and preferred over a pre-qual letter. Can be used up to 60-90 days.
- Commitment letter- a property is needed before a commitment letter can be drawn up. Once your
client finds a property, signs contracts during appraisal, you get the commitment letter, order the title
report the lien search, whatever you need and you can literally close within 3 weeks -30 days if you had
to.
- Typical closings from start to finish can be 45-60 days. For a condo or coop, it can take longer than 60
days, depending on the board.
A mortgage broker is... - correct answer ✔✔is an individual or entity that is registered by the New York
State Banking Department with the ability to place, negotiate, solicit, and process residential or
commercial mortgage loans. These services are performed for a fee. The fee may be paid by the
borrower or the lender.
A mortgage broker will assist borrowers in obtaining financing necessary to conclude their transactions.
Mortgage brokers will arrange financing in the following types of real property transactions:
Acquisition
Gut renovation
Conversion
Construction/development
Refinancing of an existing mortgage on owned property
-Loan financing will fall into two primary categories of debt: debt financing and equity financing.
- a third party originator. They do not have a line of credit, they do not use their own funds to lend out a
mortgage.
- They cannot act as mortgage bankers! They bring the prospective borrower to the lender and get a fee
(like a commission) for it.
Real estate brokerage - correct answer ✔✔In residential and commercial real estate brokerage, a
transactional broker deals primarily with arranging terms of a purchase or lease transaction.
mortgage broker vs mortgage banker - correct answer ✔✔- Both mortgage brokers & bankers have to be
licensed and renew it every year. NMLS does their licensing.
-Mortgage brokers charge fees based on fee agreements, usually consisting of a percentage of the
borrowed amount or a flat fee. In a lending transaction, a fee agreement is a compensation agreement
that a borrower will enter into with a mortgage broker. In exchange, the mortgage broker assists the
borrower in the placement and origination of funds with a lender. The fee agreement normally occurs
simultaneously to that of the preapplication process (preapproval of the borrower). They introduce and
arrange financing (for qualified borrowers seeking financing) with willing lenders and also handle the
necessary loan application process.
, -A mortgage banker is an individual or entity that is licensed by the New York State Banking Department
with the ability to originate a loan to a qualified borrower or borrowers. Mortgage bankers utilize their
own funds, have their own line of credit, generally comprised of borrowed funds, to originate loans. Can
also act as a mortgage broker if they want to. Financing may be in the form of either short-term or long-
term loans.
Mortgage broker vs. banker cont'd - correct answer ✔✔to qualify for mortgage banker licensing, an
individual or entity must have:
-a net worth of not less than $250,000;
-an open line of credit of not less than $1,000,000 provided by an insurance company or institutional
bank;
-posting of a surety bond in an amount no less than $50,000;
-five previous years' experience in the business of originating residential loans;
-an honest and trustworthy character; and
-a current fingerprint card on file with the banking department in order to conduct a background check.
The license is issued with a one-year term for a fee of $1,000 per term.
When financing is funded on a long-term basis, these loans are subsequently sold to investors (in many
cases, insurance companies) that purchase these types of loans.
Where can one get a mortgage? - correct answer ✔✔-can go to a commercial lender, a savings and loan,
a credit union. They can go to a mortgage banker or a mortgage broker
- the key is to have a good relationship with a mortgage loan originator
cont'd - correct answer ✔✔-A pre-approval is needed to show commitment on the buyer and show that
he/she is financially qualified. Better and preferred over a pre-qual letter. Can be used up to 60-90 days.
- Commitment letter- a property is needed before a commitment letter can be drawn up. Once your
client finds a property, signs contracts during appraisal, you get the commitment letter, order the title
report the lien search, whatever you need and you can literally close within 3 weeks -30 days if you had
to.
- Typical closings from start to finish can be 45-60 days. For a condo or coop, it can take longer than 60
days, depending on the board.
