While there are many options available for home mortgages, one of the biggest secrets in the industry is the fact that there are many organizations that fall outside of typical disclosure regulation.  Unless you’ve lived under a rock on Mars for the last number of years, you’re infinitely aware of the new regulation that has been created in an effort to help the consumer.  Unfortunately, in a lot of areas, its in fact done just the opposite, and unless you’re aware of these new changes you could be putting yourself in a losing position against your mortgage lender. 

 

IF you get a loan from one of these organizations, you’ll get a higher interest rate and will be out thousands of dollars.

The mortgage industry is regulated by three entities that license the organization and give them the ability to grant loans.  They are:

  1. The BRE (The Bureau of Real Estate
  2. The DBO (The Business
  3. Retail

The issue is that most people will fall to a very simple trap.  When shopping for a home mortage DO NOT compare pricing from one licensing organization to the next.  Rather compare prices from different licensing organizations. 

 

Why?

 

Companies that are licensed under the DBO and retail do not need to disclose their compensation.  Additionally, they get to keep any rebate that should come back to the client.  While this seems somewhat intuitive, if a client shops three retail lenders against one another (B of A, Wells, CHASE), then they’re only getting what these three entities can offer. In other words there may not be a huge variance and the client will typically acquiesce to a higher than normal interest rate.

Wholesale lenders on the other hand almost ALWAYS have better interest rates.  

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