• Font Size    
E-mail

Close Window E-mail This Page

Finding A Good Mortgage Broker Is Getting Easier

Required fields are marked with an asterisk(*)

The information you provide will be used only to send the requested e-mail and will not be used to send any other e-mail communications. Read more in our Privacy Policy

Send E-mail

   Print     Share +   
Jan 26, 2009 9:31 pm US/Mountain

Finding A Good Mortgage Broker Is Getting Easier

Written by Alan Gionet

Reporting
Alan Gionet
  Many people have gotten in over their heads investing in real estate because of dishonest mortgage brokers. So how do you protect yourself from a bad mortgage broker?

AURORA (CBS4) -- Jude Sandvall sells real estate; and buys it. But he says he was in over his head.

"In reality, had it been done honestly, there's no way that I would have been in those properties," Sandvall said.

He's lost five to foreclosure. He says he was simply talked into mortgages he really couldn't afford by a man the state says was engaged in mortgage fraud.

"He was very involved in his church. He sat at my kitchen table with my 1-year-old daughter on his lap telling my wife and me why it would be prudent for us to invest our money in investment properties and how and why we qualified to do this."

But he wasn't truly qualified, Sandvall said. The state says the broker, Wade Phelps of Phelps Financial, ran an investment scam where he promised substantial returns via equity skimming. Investigators say he falsified borrower information in order to push loans through. Sandvall says that meant claims about income that wasn't there.

Phelps has surrendered his mortgage broker license, but Sandvall wishes he had checked him out more before doing business with him.

Colorado now has some of the most aggressive mortgage broker regulation in the country. And the state has made it easy to do a simple check on your broker.

Start at the Division of Real Estate's Web page where there's a database of licenses. You can enter the name of the broker you're thinking of using and find out if there are any disciplinary actions -- or even if their license is current.

"The worst time to enter into a refinance or you're buying a new home and you're buying a mortgage, is right after opening the mail and you get some slick advertisement," said Erin Toll, Director of the Colorado Division of Real Estate. "And the advertisement promises you a rate that looks too good to be true."

Toll says things are improving. All brokers have to be licensed as of January of this year. And there are other requirements to protect you, like a good-faith estimate. You can print one from the Division of Real Estate's Web site.

"A mortgage professional should be able to tell you right away, right at the time, what you're total costs are going to be and how much they are going to be paid," Toll said. "Now there may be some fluctuation, but then they're required again to give you another disclosure."

If you aren't getting it, remember there are a lot of fish in the mortgage broker pond. Simply go somewhere else.

Sandvall echoed that advice.

"Shop your loans get more than one good-faith estimate from several different people because once you start asking questions about those good faiths, a lot of answers can come out.

And if you don't like the answers, remember you don't have to sign at closing. Don't let anyone tell you it's a big inconvenience.

"If you get to the closing table and the terms have changed from what you were promised, run, don't walk out of the room, run," Toll said.

There's more information about how mortgage brokers make their money in the video version of the story on the right.

Additional Resources

-- Mortgage Broker Database

-- Colorado Division of Real Estate

(© MMIX CBS Television Stations, Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Curious & Controversial News

You need the latest Flash player to view video content.
Click here to download.

Click here to bypass this detection if you already have the latest Flash Player.

Good Question

Top News Stories

© MMIX, CBS Television Stations Inc. All Rights Reserved.