A Wall Street Journal piece this morning asks the increasingly relevant question: Is my mortgage broker really working for me?
New Yorkers, especially, should be asking that. State Attorney General Andrew Cuomo earlier this month subpoenaed information from Manhattan appraiser Mitchell Maxwell & Jackson and from mortgage broker Manhattan Mortgage Company, one of the city's top originators of mortgages. Mr. Cuomo's office then, shortly after these initial subpoenaes, extended its dragnet to include the real-estate appraisal unit of First American Corp., another appraiser that does work in the city.
The information sought? Whether or not mortgage brokers have been pressuring appraisers to inflate or otherwise change property values.
In a city where such values have jumped this decade, the pressure is understandably on for every side of a home sale--buyer, seller, broker, mortgage broker, bank. Each side has vested financial interests in a closed deal, and buyers who trust their mortgage brokers to work for them (rather than realizing up front that the mortgage broker works for him or herself) engage in a fickle lunacy.
"The mortgage broker does not represent the borrower," one mortgage broker in Colorado told the Journal. "We sell access to money."
Borrower, beware, indeed.