How to Tell if Your Mortgage Broker is Legitimate
Over the past few years the real estate industry has gotten a somewhat unsavory reputation. Being in the industry myself, I’m biased to tell you that most real estate professionals are high quality, upstanding “business citizens.” However, as with any big purchase or transaction, smart consumers do research independent of people who stand to benefit in some way. Here’s some tips on ways to protect yourself and identify some potential problems from the start as opposed to looking back after getting shafted and thinking “If only I would have checked that!”
Check to be sure the company you’re working with is in the Better Business Bureau.
Visit the Better Business Bureau’s website and go with a company that is listed. This really should be standard practice when you’re considering making any larger purchase. The BBB is a clearinghouse of any negative feedback and in my experience it’s generally extremely accurate. The only warning here is not to let a single, irate complaint hold too much value as it could be a competitor or crazy-ish person but definitely take repeated negative feedback into account.
Call your state Real Estate Commission or Department of Real Estate.
Mortgage companies and the loan officer you were work with generally are required to have a license to broker your mortgage. It would take a pretty brash person to do so without such a license but stranger things have surely happened. I’d recommend taking a moment to Google “Your State” Real Estate Commission and calling to inquire about any possible violations or complaints filed against the company you’re planning to work with.
Ask the company if they’re properly bonded and insured.
You probably here the phrase “bonded and insured” all of the time but do you really know what it means? Bonded refers to the fact that the business holds a surety bond. In the case of a mortgage broker, ask if they have a mortgage broker surety bond. If your broker looks at you puzzled and can’t answer the question, it’s probably best to head down the road to your second choice. Insurance refers to the fact that the broker has errors and omissions insurance that will protect you should they make some sort of error (kind of self explanatory!).
The moral of the story is to be a smart consumer and don’t take anyone’s claims at face value. That’s what got us into this mess! At every point in the mortgage process, take a step back and spend a few moments verifying what you’re doing and doing a bit of quick research online. Good luck and happy home buying!
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