MBA releases policy paper clarifying roles of mortgage bankers and brokersMortgagePress.comMBA, mortgage banker, mortgage broker, Mortgage Bankers and Mortgage Brokers: Distinct Businesses Warranting Distinct Regulation
The Mortgage Bankers Association has released a new policy paper
titled, "Mortgage Bankers and Mortgage Brokers: Distinct Businesses
Warranting Distinct Regulation." The paper brings clarity about the
roles and responsibilities of mortgage bankers and mortgage brokers
to current legislative and regulatory discussions. An audio replay
of the teleconference announcing the release of the policy paper
may be accessed bl clicking here.
"Mortgage bankers and brokers are both central players in the
effort to provide the opportunity of homeownership to millions of
Americans," said David G. Kittle, CMB, MBA's Chairman-elect.
"Bankers and brokers, however, serve different functions in the
mortgage process that demand different regulatory oversight."
The recent turmoil in the mortgage and housing markets has
brought renewed attention to the mortgage origination process.
Several pieces of legislation and regulation under consideration in
Congress and the states propose improving consumer protection.
According to the paper, efforts to reform the origination process
ought to take the distinct differences between mortgage brokers and
bankers into account.
"Lenders and brokers have worked together to expand access to
mortgage credit, especially for those who may have been
traditionally had a difficult time getting home financing,"
continued Kittle. "As Congress and state and federal regulators
look at reforming how mortgages are originated, we want to make
sure they understand how bankers and brokers differ and how new
regulations ought to reflect those differences."
MBA's paper examines the different relationship and expectations
that borrowers have with bankers and brokers and the disparate
compensation structures and incentives that each have. It also
looks at the separate types and levels of oversight that each
Because improvements to the mortgage origination process can
best be achieved through proposals that recognize these
differences, MBA is recommending that:
• Borrowers receive clear disclosures of the brokers'
responsibilities and compensation;
• Mortgage brokers who claim to be or act as borrower agents
be treated legally as agents;
• Mortgage brokers have sufficient financial resources -
through a national minimum net worth requirement - to provide
protection to borrowers and mortgage bankers where necessary;
• Mortgage brokers be appropriately bonded to give consumers
greater protection; and
• All loan originators, including brokers and bankers, be
registered and appropriately licensed in accordance with rigorous
A copy of Mortgage Bankers and Mortgage Brokers: Distinct
Businesses Warranting Distinct Regulation can be found by clicking