Mortgage broking and the role of a morgage broker

MORTGAGE BROKING

A mortgage broker is an intermediary who brokers mortgage loans on behalf of individuals or businesses. Traditionally banks and financial institutions sold their own products but as the markets for mortgages became competitive.

The role of the mortgage broker has become more popular especially in countries such as the united States where there are very many mortgage broking firms. Mortgage brokers are the largest sellers of mortgage products for lenders.

The brokers exist to find a bank or a direct lender that an individual seeks with a specific loan the individual is seeking. The majority of brokers are regulated to ensure compliance with banking or finance laws in the jurisdiction of the consumer; however, the extent of the regulation depends on the jurisdiction.

Mortgage brokerage can be divided into various sectors:-

Retail Banking – that deals directly with individuals and small businesses.

Business Banking – that provides services to mid-market business.

Corporate Banking – which is directed at large business entities.

Land Mortgage Banking – that specializes in originating and/or serving land mortgage loans.

Private Banking – providing wealth management services to high net worth individuals and families.

Investment Banking – relating to activities on the financial markets.

The nature and scope of mortgage brokers’ activities varies with jurisdiction. Therefore the work undertaken by the broker will depend on the depth of their service and liabilities.