The relationship between a traditional mortgage broker and a borrower is one which has the potential for a conflict of interests. The borrower wants to obtain the best loan for his/her situation at the lowest interest rate. But the traditional mortgage broker has the ability to increase his/her income based on the interest rate charged the borrower, and the type of loan recommended.
An UpFront Mortgage Broker (UMB) operates under specific requirements as set forth in the Upfront Mortgage Broker Commitment. By virture of these requirements, the borrower and the UMB have a relationship where there is no conflict of interests.
Most consumers are in the market for a mortgage loan only a few times in their life, and have limited time to learn the rudiments, never mind the many nuances, of an extremely complex transaction. This means that unsophisticated borrowers will pay more for their mortgage loan than knowledgeable borrowers. And even knowledgeable borrowers will often pay more than they should simply because of the complexity of the mortgage shopping process.
There is no guarantee that a consumer using a UMB will obtain lowest rate or lowest fees. But consumers who utilizing a UMB will have the best opportunity to obtain the lowest price for a mortgage loan.
