JSMedia – Even with the recent housing market crash, lenders and mortgage brokers are still pushing CPAs. Despite their growing reliance on CPAs, they’re reluctant to lose their business. Here’s how they’re keeping their clients and their own businesses healthy. Lenders and mortgage brokers have been pushing CPAs since the early 2000s. This trend will likely continue for at least a few more years.
First, mortgage brokers aren’t doing you any favors. Although they aren’t directly selling the loan, they do profit from the mortgage broker’s work. In fact, they can sell their own loans on the secondary market. As a result, their compensation is hidden and uncapped. This means that they’re taking advantage of unsuspecting homeowners. And it’s the mortgage broker’s compensation that should be on the Closing Disclosure – not the CPA’s.
Lenders and mortgage brokers can still charge borrowers substantially more than the standard commission. However, in recent years, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed to limit abuses in the industry. Now, mortgage brokers are not allowed to charge clients any fees that are related to their interest rate or more than 3% of the loan amount. These fees should be disclosed on the Closing Disclosure.
Lenders and Mortgage Brokers Still Pushing CPAs
In addition, lenders and mortgage brokers are still pushing CPAs for verification and comfort letters. While these types of services are nice to have, the majority of consumers do not require them. The best way to avoid unnecessary fees is to choose a lender that offers these services. There are still some lenders that offer a nice-to-have service, but the majority are a good option for most borrowers.
In addition to requiring lenders to pay their CPAs for the verification and comfort letters they provide, mortgage brokers and lenders are still pushing CPAs for their services. The reason for this is obvious: they do not want to risk liability for malpractice. They do not want to take on any liability in the event of a bad audit. The law states that the lender and mortgage broker must communicate effectively and frequently with their CPAs.
Lenders should be more proactive in shaping the rules and procedures for mortgage loans. These rules must ensure the independence of the auditor, and the independence of the lender and the client should be fully represented. Lenders should be aware of their clients’ accountants and insist that they change them if they are not satisfied with the quality of their work. It may seem like a simple idea, but it isn’t that simple.
While the push for CPAs isn’t new, it is a continuing concern for lenders and brokers. They have been pushed to expand their scope of business and include non-CPAs. While they shouldn’t be pushing CPAs, they can insist on a qualified CPA. As long as the lender and broker are insisting on a CPA, the process will be smooth.
While many people do not know who is better qualified for the job, they should be prepared to work with both CPAs and mortgage brokers. While the CPAs are still important in this role, they also need to have the resources to deal with different types of lenders and customers. These professionals can also advise you on the best type of mortgage for your needs. They can help you make the right choice.
Although the role of mortgage brokers isn’t the same as that of CPAs, they still earn money from commissions and fees. Lenders and mortgage brokers often prioritize loans from less competitive lenders, but they also pay their agents with a percentage of the loan amount. While mortgage brokers are paid on a commission basis, they’re not directly paid by lenders, and they may not have access to the best loan options.
Despite the Qualified Mortgage Rule (QMR), mortgage brokers and agents still push CPAs. But while the QMR may have a lower reputation, it’s still a necessity for lenders to follow these guidelines. Without a doubt, mortgage brokers will continue to drive sales for their products. They should also be aware of their competitors’ business models. Lenders & Mortgage Brokers Should Use CPAs