This review list is being supplied to you in order to inform you about the document in question and to assist you in preparing it for submission. Generally speaking, a mortgage broker will be bound by this conventional brokerage agreement.
- Make numerous copies of the document. Give one to each person who will be signing the document. One should be kept with the transaction file.
Mortgage Broker Agreement
Mortgage Broker Agreement
___________________, referred to as BROKER, and the estate of ___________________, referred to as CLIENT, agree:
Client is desirous of obtaining a mortgage loan on the following terms:
Loan to be secured by the following described real property:
______________________________________________________________Minimum amount of loan: $____________(___________&___/100 dollars)
Maximum amount of loan: $____________(___________&___/100 dollars)
Maximum interest rate as an APR under regulation Z: _____%
Repayment terms: ___________________________________________
Personal guarantees: _______________________________________
Other terms: _______________________________________________BROKER shall act as the exclusive broker for CLIENT in obtaining the mortgage described above for ___ months from the date of execution of this agreement.
Upon obtaining a loan conforming to the specifications set forth, BROKER shall be entitled to a commission of _______% of the principal amount of the loan of the loan.
During the term of this agreement, CLIENT agrees that it will:
keep the property insured for a minimum amount of $____ (_______________&___/100 dollars); to keep the premises in good repair; to inform the BROKER immediately of any change in rent rolls (if the premises are rented); to provide all reasonable cooperation requested by BROKER.CLIENT agrees to provide upon BROKER’s request:
financial statements or information regarding CLIENT and any co-signors proposed; bona fide loan processing fees requested by entities seeking to provide loans to CLIENT, not exceeding $_____(_______________&___/100 dollars) without the prior permission of the CLIENT.BROKER shall give reasonable and regular status reports to CLIENT regarding all relevant developments during the period of this agreement to CLIENT.
BROKER and CLIENT shall mutually non-disclose any information provided by one another and shall take all reasonable steps to non-disclose the information provided to one another.
Dated: _______________________________
_________________
Broker_________________
Client
Mortgage Broker Agreement
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. This is standard brokerage agreement that applies to a mortgage broker.
1. Make multiple copies. Give one to each signatory. Keep one with the transaction file.
Frequently Asked Questions
What is a mortgage broker agreement?
A mortgage broker agreement is a contract between a client and a broker that outlines the terms under which the broker will assist the client in obtaining a mortgage loan. It specifies the loan amount, interest rate, repayment terms, and other conditions. The agreement also establishes the broker's exclusive right to act on the client's behalf for a set period and the commission the broker will receive upon successful procurement of a loan.
What does exclusive broker mean in a mortgage broker agreement?
In a mortgage broker agreement, exclusive broker means that the client agrees to work solely with the named broker to obtain the mortgage described in the contract. This exclusivity lasts for a specified number of months from the date the agreement is executed. During this period, the client cannot engage another broker to secure the same mortgage.
How is the broker's commission determined in a mortgage broker agreement?
The broker's commission is determined as a percentage of the principal amount of the loan, as specified in the agreement. The exact percentage is filled in on the contract. The commission is only earned upon obtaining a loan that conforms to the specifications set forth in the agreement.
What loan terms are specified in a mortgage broker agreement?
A mortgage broker agreement specifies the minimum and maximum loan amounts, the maximum interest rate as an APR under Regulation Z, the repayment terms, any personal guarantees, and other terms. It also includes a description of the real property that will secure the loan. These details ensure both parties have a clear understanding of the loan being sought.
What insurance requirements are included in a mortgage broker agreement?
The agreement requires the client to keep the property insured for a minimum amount, which is specified in the contract. This insurance requirement is one of the client's obligations during the term of the agreement. The exact minimum amount is filled in on the form.
How long does a mortgage broker agreement last?
A mortgage broker agreement lasts for a specified number of months from the date of execution, as indicated in the contract. During this term, the broker acts as the exclusive broker for the client. The duration is agreed upon by both parties and filled in on the form.
What happens if the client finds a loan without the broker during the exclusive period?
The agreement does not explicitly state the consequences of the client obtaining a loan without the broker during the exclusive period. However, because the broker is granted exclusive rights, the client may still be obligated to pay the broker's commission if a conforming loan is obtained. The specific terms would depend on the contract language and applicable laws.
What is Regulation Z in relation to a mortgage broker agreement?
Regulation Z is a federal regulation that implements the Truth in Lending Act, which requires disclosure of credit terms. In the mortgage broker agreement, the maximum interest rate is expressed as an APR under Regulation Z. This ensures the client understands the true cost of credit.
Can a mortgage broker agreement be customized?
Yes, a mortgage broker agreement includes blank fields for loan amount, interest rate, repayment terms, personal guarantees, other terms, commission percentage, insurance amount, and the duration of exclusivity. These fields allow the agreement to be tailored to the specific needs of the client and the broker. The parties can fill in the details that apply to their situation.
What are the client's obligations under a mortgage broker agreement?
Under a mortgage broker agreement, the client agrees to keep the property insured for a minimum amount specified in the contract. The client also agrees to work exclusively with the broker for the specified term to obtain the mortgage. Additional obligations may be outlined in the other terms section of the agreement.
