"The bank said it would require mortgage brokers to supply evidence that they provided disclosures to borrowers early on in the loan process in an effort to “help ensure that borrowers fully understand the terms of the loan their brokers are requesting in addition to the total compensation the borrower will pay to the broker for their services.”"
Update: A reader wrote in noting that the above article was wrongly depicting mortgage brokers. His response is included below:
The article "Washington Mutual getting tough on Mortgage Brokers written on 10/01/07 requires a response, as it depicts Mortgage Brokers in a bad light, and is insulting to those of us who love the business.
Those who know the mortgage business understand that Mortgage Brokers are the only Mortgage Originators within the United States who are required to disclose rates and terms and all income earned, including Yield Spread Premiums (YSP) upfront and within 3 days of obtaining a loan application and reviewing a borrowers credit report.
Furthermore, Mortgage Brokers, through wholesale channels like WaMu's, are required to provide borrower signed Good Faith Estimates (GFE) and Truth in Lending (TIL) Disclosures to wholesale lenders with every submitted loan package.
Washington Mutual and it's Chairman and CEO Kelly Killinger, while pretending to offer consumers protection against Mortgage Brokers, fail to explain that they're really only adopting a policy that has been in practice for many years, absent the call center feature, which will in the end only confuse consumers.
This articles true intent is to discredit Mortgage Brokers and blame them for today's mortgage credit problems. Readers should know that lenders such as Washington Mutual have long been responsible for designing the loan programs and procedures that Mortgage Brokers use and follow.
David Schnier, Washington Mutuals Home Loan President ends the article by stating that Wa Mu's wholesale business is important and that Wa Mu values their broker relationships.