Massachusetts can go along way to lowering the cost of buying and selling a home by requiring all fees to be transparent. Here is one aspect of the mortgage business.
1. A mortgage broker is an independent contractor who typically gets a 1%
transaction fee for the amount of the loan. He shops for the best deal, and his best pay day.On a 500,000 mortage that is $5,000.
2. A mortgage banker works directly for the bank (Chase, Countrywide,
Wamu) and typically gets 50-80 bps of the total amount of the loan.
so assuming you go through a bank, the banker gets the whole commission (likely around 60 bps of the total loan).
If consumers were are aware of these fee’s they would be able to negotiate more competitive pricing on their mortgages and closing costs.
Title Insurance is a huge black hole. Insurance co’s offer closing lawyers kick backs for choosing using their policies. I have never heard of a claim being filed.
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I wonder how many people realize that most of the cash paid for title insurance goes to the lawyer?