MORTGAGE BROKER FEE DISCLOSURE
You have applied to a mortgage broker for a residential mortgage loan. The mortgage broker will submit your application for a residential mortgage loan to a participating lender with which if from time to time contracts upon such terms and conditions as you may request or a lender may require. The lenders have asked that we furnish this form to you to clarify the role of mortgage brokers. This form supplements other disclosures or agreements require by law that you should receive from the mortgage broker concerning your loan application.
SECTION 1. NATURE OF RELATIONSHIP. In connection with this mortgage loan:
v The mortgage broker may be acting as an independent contractor and not as your agent. If you are unsure of the nature of your relationship, please ask the mortgage broker for clarification.
v The mortgage broker has entered into separate independent contractor agreements with various lenders.
v While the mortgage broker seeks to assist you in meeting your financial needs, it does not distribute the products of all lenders or investors in the market and cannot guarantee the lowest price or best terms available in the market.
SECTION 2. THE MORTGAGE BROKER’S COMPENSATION. The lenders whose loan products are distributed by the mortgage broker generally provide their loan products to the mortgage broker at a wholesale rate.
v The retail price a mortgage broker offers you – your interest rate, local points and fees – will include the mortgage broker’s compensation.
v In some cases, the mortgage broker may be paid all of its compensation by either you or the lender.
v Alternatively, the mortgage broker may be paid a portion of its compensation by both you and the lender. For example, in some cases, if you would rather pay a lower interest rate, you may pay higher up-front points and fees.
v Also, in some cases, if you would rather pay less up-front, you may wish to have some or all the mortgage broker’s fees paid directly by the lender, which will result in a higher interest rate and higher monthly payments than you otherwise would be required to pay.
v The mortgage broker may also be paid by the lender based on (i) the value of the mortgage loan or the related servicing rights in the market place or (ii) other services, goods or facilities performed or provided by the mortgage broker to the lender.
You may work with the mortgage broker to select the method in which it receives its compensation depending on your financial needs, subject to the lender’s program requirements and credit underwriting guidelines.
The amount of fees and charges that you pay in connection with your loan will be estimated on your Good Faith Estimate. The final amounts will be disclosed on your HUD-1or HUD-1A Settlement Statement.
By signing below, applicant(s) acknowledge that you have read and understand this document. You also acknowledge that you have received a copy of this document.
Borrower’s Signature Date
Co-Borrower’s Signature Date