Who does a mortgage broker work for ?

From: Rolf Latham

HI All

Recently, there was a post on the topic of who represents whom in the mortgage broking transaction.


A different Interpretation of who reprsents whom in the broking transaction AND some new legislation on the way:


A number of brokers are not independent because they only deal with
one or a few lenders. Other brokers prefer certain lenders because they pay
higher amounts of commission than others. The report states that given
market changes, there is now a far greater degree of competition between
lenders and so the role of finance brokers is seen increasingly by consumers
as a method to save time in searching for the best available deal. If a
broker fails to do this, the fundamental reason for the consumer using the
broker has been breached. The steering committee considers that the borrower
is the broker's client, irrespective of who pays the broker's fee.

Full item is at


Bout bloody time too !

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Reply: 1
From: Ross Sondergeld

Hi Rolf,

Subject: Who does a mortgage broker work for ?

Extract quoto, "The steering committee considers that the borrower
is the broker's client, irrespective of who pays the broker's fee."

Well... Australia is about to enter "dangerous waters"!

Enter... "undisclosed dual agency" into a search engine (i.e. google).

It's an academic debate... but it will certainly change... traditional real
estate and finance brokering in OZ... (and seminar presenters ?)

And if you really want to get into the topic...

P.S. And if you're a lawyer, try and find some of John Reilly's stuff... (US
agency expert). Find "agency relationships in real estate". Good intro to
the topic.

Applies to all types of agents.

Ross on the Gold Coast
Buyerside Real Estate

Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp.
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Reply: 1.1
From: Rolf Latham

Hi Ross

The issue of "dual Agency", and i think I have covered this before is of less relevance in my business than it is in yours.

NO independent broker signs an agreement with any one lender to "sell" or market their product for the highest price it can be flogged for. In FACT most lenders ask you to sign an agreement that says the EXACT opposite, thet in fact as a broker you are NOT an agent of the lender.

In Real Estate Sales, the Selling Agent makes an agreement the vendor of the property with the specific written intent to sell his/her property for a VARIABLE price, that is the highest price which the market will bear, commonly even on an exclusive basis.

Mortgages are an easily comparable "commodity item", in 95 % of cases with fixed pricing, whereas a piece of real estate is indeed not.

Chalk and cheese I feel Ross, because at the end of the day NO one is going to pay a broker for sourcing a commodity item, that the client can buy himself at a similar price on the open market.


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