Upfront Mortgage Broker (UMB)
Definition of "Upfront Mortgage Broker (UMB)"
A mortgage broker who sets a fee for services, in writing, at the outset of the transaction and acts as the borrower's agent in shopping for the best deal. Customers of UMBs pay the broker's fee plus wholesale loan prices, which are disclosed at the customer's request. In contrast, other mortgage brokers (MBs) add a markup to the wholesale prices and quote only the resulting 'retail prices' to customers. Most MBs reveal their markup only in required disclosures after an application has been submitted. UMBs credit customers with any rebates they receive from lenders or home sellers that would otherwise increase the broker's fee beyond what was agreed upon. Such rebates are often an added source of revenue to MBs. Once the UMB's fee has been established, the UMB's interests are largely aligned with those of customers. In contrast, MBs are in a conflict situation with customers.
Popular Mortgage Terms
A bundle of mortgage characteristics that lenders view as comprising a distinct category. The characteristics used include whether it is an FRM, ARM, or Balloon, the term, the initial ...
An upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., '3 points' means a charge equal to 3% of the loan ...
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A borrower with the best credit rating, deserving of the lowest prices that lenders offer. ...
A plan purporting to protect FHA homebuyers against property defects. ...
Compiling and maintaining the file of information about the transaction, including the credit report, appraisal, verification of employment and assets, and so on. Mortgage brokers usually ...
A fee that some lenders charge to accept an application. It may or may not cover other costs such as a property appraisal or credit report, and it may or may not be refundable if the lender ...
The portion of the monthly payment that is used to reduce the loan balance. ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
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