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New York Real Estate for Salespersons, 5 th e

New York Real Estate for Salespersons, 5 th e. By Marcia Darvin Spada Cengage Learning. Chapter 7. Mortgage Brokerage. Mortgage Brokerage. Chapter 7 Key Terms. Lender rebate Mortgage banker Mortgage broker Mortgage broker dual agency disclosure form Mortgage commitment.

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New York Real Estate for Salespersons, 5 th e

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  1. New York Real Estate for Salespersons, 5the By Marcia Darvin Spada Cengage Learning Chapter 7 Mortgage Brokerage

  2. Chapter 7 Mortgage Brokerage Mortgage Brokerage Chapter 7 Mortgage Brokerage

  3. Chapter 7 Key Terms Lender rebate Mortgage banker Mortgage broker Mortgage broker dual agency disclosure form Mortgage commitment Nonconforming form Pre-application and Fee agreement Pre-approval Prequalification Rate lock Underwriting Chapter 7 Mortgage Brokerage

  4. What is a Mortgage Broker? • An individual or company registered by the NYS Department of Financial Services • Finds or sources loan for purchaser Chapter 7 Mortgage Brokerage

  5. NYS Requirements for a Mortgage Broker Registration Chapter 7 Mortgage Brokerage

  6. NYS Dept of Financial Services Licenses and Registrations • Mortgage loan originator license for individuals • Mortgage loan servicer registration for companies • Apply online to the NYSDFS through the Nationwide Mortgage Licensing System (NMLS) • Mortgage broker registration for companies • Mortgage banker license for companies • Mortgage loan originators must work under the supervision of a mortgage banker or mortgage broker Chapter 7 Mortgage Brokerage

  7. Experience for the Broker Registration • May use his broker license to become a mortgage broker • Broker license must be current • Must have actively participated in the residential mortgage business for two years Chapter 7 Mortgage Brokerage

  8. Dual Agency Disclosure under the Banking and NY Real Property Laws • Mortgage brokers who are also real estate brokers representing the seller may find themselves in a dual agency situation • Legal with disclosure and informed consent • Article 12-D of NY Banking Law • Mortgage broker and mortgage banker who is also a real estate broker in the same residential real estate transaction must disclose the dual agency • Real Property Law • Section 443 also requires dual agency disclosure • The real estate agency disclosure form is used when the property requires an agency disclosure form (one- to four-unit residential properties) Chapter 7 Mortgage Brokerage

  9. New York Mortgage Banker Requirements Chapter 7 Mortgage Brokerage

  10. Mortgage Brokers vs. Mortgage Bankers • The requirements to become a banker or a broker are much different • A mortgage banker may be responsible for collecting the mortgage payments and risk its own credit • The mortgage banker typically sells the loan to a larger lender • A mortgage broker does not lend his company’s money Chapter 7 Mortgage Brokerage

  11. The Role of the Mortgage Broker/Consultant in the Real Estate Transaction • A mortgage broker/consultant can streamline the process and find the financing • The real estate agent may recommend a mortgage broker when a purchaser is not already working with someone • Agent generally requires a pre-qualification letter • A prequalification is not a commitment to the lender • Loan officer must first determine that a purchaser is qualified then issues the letter • The buyer’s attorney wants to know when a mortgage commitment is finalized Chapter 7 Mortgage Brokerage

  12. Obtaining a Mortgage Commitment • Once a purchaser signs a sale of contract he has a certain number of days to obtain a mortgage commitment • This commitment is a statement by a lending institution that assures the purchaser that the lender will loan a certain sum of money • Loan underwriting is the process in which the lender evaluates all of the borrower’s financial data and determines whether the borrower will obtain the loan Chapter 7 Mortgage Brokerage

  13. Finding Mortgage Products • A nonconforming loan: • A loan that does not meet Federal Reserve Banking criteria for funding. • Some mortgage backed securities Chapter 7 Mortgage Brokerage

  14. Scheduling and Closing the Loan • Mortgage broker Assists with: • Assuring that lender conditions are satisfied and funds are available at closing • Scheduling a date for closing between all parties • Some mortgage brokers process loans and close loans in their own name • At or about the time of settlement they transfer these loans to lender who then advance funds for the loans • Known as table funding Chapter 7 Mortgage Brokerage

  15. Mortgage Broker’s Commission • Yield spread premium (lender rebate): • difference between interest rate on a par loan and an above par loan that a mortgage broker can deliver to the lender • expressed in the number of points paid to a mortgage broker Chapter 7 Mortgage Brokerage

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