Mortgage Broker To Banker
Making the transition from mortgage broker to mortgage banker can be somewhat overwhelming, but it does have its advantages. As a Mortgage banker you will need the proper capital requirements to acquire licensing and warehouse lines, most professionals hire a mortgage consultant, and/or train an inside employee to help with the paperwork. Moving from broker to banker will give you more control over your closings, and allow you to have the ability to close loans in your own name, and avoid some of the new CFPB (Consumer Financial Protection Bureau) rules and regulations that apply to brokers.
The first step to tackling the challenges of moving from mortgage broker to banker is to decide if hiring a consultant is the best business decision for you. The good news is many are more affordable than people may think. The learning curve itself, and the time that takes, can actually amount to costing you more out of pocket – not to mention many hours of frustration. Professional mortgage consultants that specialize in broker to banker transitions often have contracts with mortgage banking software companies, as well as warehouse line providers, to help spread the cost of their time around so it doesn’t all land on the brokers shoulders.
Moving from mortgage broker to banker is really not that difficult. Likewise, getting approved as a mortgage banker in a particular state generally does not take that long, with the exception of a few, New York being one of them. And it is also true, that finding out the states requirements is as easy as calling the banking department for that state, or simply looking them up online. The frustration and time come into play once you actually begin submitting your applications for licensing to the States. These applications have to be pristine, and done absolutely correct with zero errors, or they will be returned to you immediately and continually until they are perfect. This is where having an experienced professional who has dealt with dozens of applications and the individual state banking departments, definitely is a benefit to you. They insure that you will get the paperwork over the right way, the first time and also handle any issues that may arise after submission.
Finding out about warehouse lines for bankers is another avenue that can take some time. Locating broker to banker warehouse lines is another challenge, and finding out which ones you may qualify is another potential issue. There are capital requirements, is there a personal guarantee required? Do they offer flexible net worth requirements? These are just some of the questions needed to be answered when considering a warehouse line of credit for mortgage banking.
Still Interested in becoming a mortgage banker? If you think that net worth or the complexity is just too much think again. Our company helps brokers understand their options with a single point of contact. We provide the facts in plain English;
1. What investors support emerging bankers.
2. Warehouse lenders that approve new correspondents with as little as $50,000 net worth.
3. Service providers that cost effectively and compliantly provide your team with back office support for closing, funding, shipping and loan balancing processes.
4. Technology tools that
The benefits of mortgage banking include your company becomes an asset, you control your service levels, you can maximize the income and fees on your loans. Call today we can efficiently help you understand what it takes to become a mortgage banker. There are also other alternatives to becoming a banker yourself, there are direct lenders looking for brokers to become branch managers of offices, to find out more about mortgage branch opportunities in your state contact our office, 877-889-7474.
For more information about the new Qm rule that will go into effect on January 10, 2014
watch the video or read below and click on the resource link provided.
When HOEPA was enacted in 1994, it required that “all compensation paid to mortgage
brokers” be counted toward the threshold for points and fees that triggers special consumer
protections under the statute. Specifically, TILA section 103(aa)(4) provided that charges are
included in points and fees only if they are payable at or before consummation and did not
expressly address whether “backend” payments from creditors to mortgage brokers funded out of
the interest rate (commonly referred to as yield spread premiums) are included in points and
fees.79 This requirement is implemented in existing § 1026.32(b)(1)(ii), which requires that all
79 Some commenters use the term “yield spread premium” to refer to any payment from a creditor to a mortgage
broker that is funded by increasing the interest rate that would otherwise be charged to the consumer in the absence
of that payment. These commenters generally assume that any payment to the brokerage firm by the creditor is
funded out of the interest rate, reasoning that had the consumer paid the brokerage firm directly, the creditor would
have had lower expenses and would have been able to charge a lower rate. Other commenters use the term “yield
spread premium” more narrowly to refer only to a payment from a creditor to a mortgage broker that is based on the
interest rate, i.e., the mortgage broker receives a larger payment if the consumer agrees to a higher interest rate. To
avoid confusion, the Bureau is limiting its use of the term and is instead more specifically describing the payment at
Currently, the points and fees threshold for determining whether a loan is a high-cost mortgage is the greater of 8
percent of the total loan amount or $400 (adjusted for inflation). Section 1431 of the Dodd-Frank Act lowered the
points and fees threshold for determining whether a loan is a high-cost mortgage to 5 percent of the total transaction
amount for loans of $20,000 or more and to the lesser of 8 percent of the total transaction amount or $1,000 for
loans less than $20,000. 81 “Mortgage originator” is generally defined to include “any person who, for direct or indirect compensation or
gain, or in the expectation of direct or indirect compensation or gain—(i) takes a residential mortgage loan
application; (ii) assists a consumer in obtaining or applying to obtain a residential mortgage loan; or (iii) offers or
negotiates terms of a residential mortgage loan.” TILA section 103(dd)(2). The statute excludes certain persons
from the definition, including a person who performs purely administrative or clerical tasks; an employee of a
retailer of manufactured homes who does not take a residential mortgage application or offer or negotiate terms of a
residential mortgage loan; and, subject to certain conditions, real estate brokers, sellers who finance three or fewer
properties in a 12-month period, and servicers. TILA section 103(dd)(2)(C) through (F). More information can be found http://www.consumerfinance.gov/regulations/ability-to-repay-and-qualified-mortgage-standards-under-the-truth-in-lending-act-regulation-z/