On July 30, 2008, the Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act of 2008 as part of the Housing and Economic Recovery Act was signed into law. A major aspect of this law is the creation of the Nationwide Mortgage Licensing System and Registry (NMLSR). A stated goal of the NMLSR is as follows:
Helping ensure that loan originators be required to “act in the best interests of the consumer”.
With these words one would suspect that they are being represented perhaps even in a fiduciary capacity.
When you act in the best interest of another you may be said to act as a fiduciary. Black’s Law Dictionary describes a fiduciary relationship as “one founded on trust or confidence reposed by one person in the integrity and fidelity of another.” Or in other words, a fiduciary is someone who accepts the responsibility for taking care of the needs or property of another person for the benefit of that person. A fiduciary has a duty to act primarily for the client’s benefit in matters connected with the undertaking and not for the fiduciary’s own personal interest. Scrupulous good faith and candor are always required.
When you go to obtain financing for purchasing or refinancing real property you are not represented. In fact, we are required to have you sign a form that says we are not your agent and therefore no fiduciary relationship exists. This form was designed by the Mortgage Banker’s Association and no lender will accept a loan that does not have this form included.
It is a veiled attempt by the banking industry to leave you naked when you seek financing.
As a seller of real estate you are represented by the listing agent. And as a buyer of real property you have the right to elect representation in the form a buyer’s agent. When you go to trial you have a fiduciary in the form of an attorney. Your CPA can represent you before the IRS. But when you seek financing for the largest financial transaction that most of us will make the banking industry in the guise of the Mortgage Banker’s Association doesn’t want you to be represented.
Don’t go looking for representation from the loan officer at a bank. You’ll find none. They are employees of the bank that doesn’t want you represented. Their hands are tied.
Come see us. We have a solution.