What is Broker's Call?

A mortgage broker acts as an intermediary who sources mortgage loans on behalf of individuals or businesses.

Traditionally, banks and other lending institutions have distributed their own products. However as markets for mortgages have become more competitive, the role of the mortgage broker has become more popular. Today in most developed mortgage markets (especially the U.S., UK, Australia, New Zealand, Spain and Canada) mortgage brokers are the largest distributors of mortgage products for lenders.

The majority of mortgage brokers are regulated to ensure compliance with banking and or finance laws in the jurisdiction of the consumer; however, the extent of the regulation depends on the jurisdiction. Only one state within the U.S. has no laws that govern mortgage lending.

Mortgage brokerage in the USA

According to a 2004 study by Wholesale Access Mortgage Research & Consulting, Inc., there are approximately 53,000 mortgage brokerage companies that employ an estimated 418,700 employees and originate 68% of all residential loans in the U.S..The remaining 32% is retail done through the lender's retail channel, which means the lender does not go through a broker.

The mortgage broker industry is regulated by 10 federal laws, five federal enforcement agencies and over 49 state laws or licensing boards.

The banks have used brokers to outsource the job of finding and qualifying borrowers, and also to outsource some of the liabilities for fraud and foreclosure onto the originators through legal agreements.

During the process of loan origination, the broker gathers and processes paperwork associated with mortgaging and real estate.