The SEC has accused mortgage brokers of originating the majority of the bad loans that went into an $855m mortgage-backed security deal that has landed a lawsuit at Bank of America’s door.
Hmmm… Interesting view from the SEC, because mortgage brokers DON’T:
- Come up with loan programs or guidelines
- Underwrite loans, or Quality Control loans
- Fund or Close loans
Mortgage brokers take applications, collect documentation, go over loan options, select the appropriate lender, then send everything to the actual lender for underwriting and approval. Mortgage brokers do not make any underwriting decisions.
While brokers have become the scapegoat for many of the problems, the reality is that loose loan guidelines, very poor underwriting, and a desire to push everything through the system was the real culprit.
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