Mortgage broker
Mortgage brokers are companies or individuals who specialize in the provision of real estate finance loans . They do not act as a lender themselves , but rather broker mortgage loans from a third lender to finance a property for the borrower . The lenders can be banks , building societies or insurers . Borrowers are mostly consumers or companies in the real estate industry .
Business model
The mortgage broker compares the offers of many banks with the help of databases for the potential borrower.
If a loan agreement is concluded with one of these banks, the mortgage broker receives a standard commission of 1 percent of the loan amount from the lender for the successful mediation. The commission varies between lenders. The borrower does not have to pay the commission additionally. It is already included in the interest rate on the loan.
By using a mortgage broker, the borrower saves having to compare the loan offers of many banks. In contrast to the traditional bank distribution of in-house loans, mortgage brokers offer a wider variety of products. Despite the fact that the loan term includes the commission for the mortgage broker, the loan is usually not more expensive - and often cheaper - than directly from the lender. However, due to different commissions, it is still useful to compare the offers of several mortgage brokers to ensure that you as the borrower get the cheapest loan offer.
Historical development
With Sonnenblick-Goldman , the first mortgage broker was in 1893 in New York City founded. Sonnenblick-Goldman specializes in arranging loans for complex, commercial real estate projects. As the development progressed, a large number of local mortgage brokers emerged due to the need for real estate and real estate financing in the western US, which is currently being developed. These combined loans from banks and private investors to provide funding that banks alone have declined.
After the Great Depression , the US mortgage market became highly regulated. Mortgage bankers took over the financing of large real estate projects through state programs, savings banks (American "Savings and Loan Banks") took over the local housing finance and the mortgage brokers were responsible for the rest. With the deregulation of the American banking and mortgage market before and as a result of the savings and loan crisis , many former sales representatives from savings banks became independent mortgage brokers.
In the other Anglo-Saxon countries, mortgage brokers emerged in the 1970s (UK) and 1980s (Australia). In 1979, California's mortgage brokerage business was first regulated . In the 1990s they became dominant in these markets.
Up until the 1990s there were only a few regionally specialized mortgage brokers in Germany. With the increasing spread of the Internet and the adoption of the American eBusiness business models, numerous Internet-based mortgage brokers were founded in Germany, Italy and France from 1990 onwards. In 2012, mortgage brokers in Germany had a market share of around 20–30 percent in the sale of real estate financing.
In addition to the financing banks and state institutions, American mortgage brokers are also regularly held responsible for the financial crisis that was triggered by the collapse of the US subprime market in 2007 .
Legal framework
Situation in the European Union
In principle, in the European Union, mortgage brokers are subject to the conditions of the Consumer Credit Directive when arranging loans to consumers . This is supplemented by country-specific legislation for credit intermediaries in general and mortgage brokers in particular. Due to the special requirements for brokering mortgage loans and the previously very different regulations in the individual member states, on December 10, 2013, the EU reorganized the legal framework for the activities of mortgage brokers across Europe with the Mortgage Credit Directive.
Situation in Germany
In Germany, mortgage brokers must meet the same requirements as general credit brokers when it comes to brokering credit to consumers and businesses. So far, the job description of the mortgage broker has not been regulated by law in Germany. The specialist academy for the real estate industry offers training to become a “Certified Mortgage Broker (FMA)”.
Situation in Austria
In Austria, the personal loan broker may only broker loans that are not secured by mortgages. The job of a mortgage broker falls into the job description of the real estate agent. Only real estate agents are allowed to broker mortgage loans.
Individual evidence
- ↑ Definition of the term in the onpulson business lexicon published by Campus Verlag , accessed on January 21, 2014.
- ^ A b Daniel Bakir: Home financing through mortgage brokers. Where to find the cheapest real estate loans. In: stern.de . Retrieved January 21, 2014.
- ↑ a b Real estate loans: Top loans from the intermediary. Stiftung Warentest, October 9, 2012, accessed on January 21, 2014.
- ↑ a b Alex Nackoul: Mortgage Brokering: A Short History (part 1 of 2). In: ScotsmanGuide.com . March 2006, accessed January 22, 2014.
- ^ Christian Fejer: The subprime crisis. An empirical study taking into account the principal-agent theory. Konrad Adenauer Foundation, Washington, DC, accessed January 21, 2014.
- ↑ Mortgage Credit. ( Memento of the original from February 3, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. In: ec.europa.eu . European Commission, December 10, 2013, accessed January 21, 2014.
- ↑ Website of the specialist academy for the real estate industry on the range of seminars, accessed on January 21, 2014.
- ↑ Credit intermediary . Chamber for workers and employees for Upper Austria, accessed on January 21, 2014.
