Question & Answer

Question: How should we assess for fair lending if we are using mortgage brokers to originate some of our loans?

Answer: When using mortgage brokers, it is particularly important to look at the loans they are bringing in. Look at these loans as a separate pool and then compare them to loans originated directly by the bank. Also, look at each broker separately. Then look at the loans in the context of your market to be sure they adequately represent your market.

When using mortgage brokers to bring in loans, you are essentially relying on them to decide what loans are brought in. They are making some critical decisions that could leave your bank holding the bag. You need to know what those decisions are.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 13 & 14, 10/98