According to the Colorado Division of Real Estate, "On and after January 1, 2008, all mortgage brokers conducting business in this state must be licensed with the Division of Real Estate pursuant to Senate Bill 07-203. Only those mortgage brokers who are licensed or exempt from licensure by law may broker a mortgage, offer to broker a mortgage, act as a mortgage broker, or offer to act as a mortgage brokers.
There is also NO regulation of mortgage advertising. There are federal and state laws that apply to the way in which mortgage companies advertise. The Federal law is the Truth in Lending Act the details of which can be found at:
and the state Colorado Consumer Equity Protection Act (CCEPA) the details of which can be found at:
Tips for selecting the right lender and managing your loan application:
- Before shopping for a lender, know your credit score and how much you wish to spend on a monthly mortgage payment. If your credit score is above 680, you should qualify for an "A" paper mortgage. Scores in the range of 620-680 will still allow you to negotiate for a good rate.
To get a free copy of your credit report
report - A summary of activity reflected in a company's BBB file. Includes basic business background, BBB membership information, and Bureau complaint activity over the previous three years. Also reports may include any known government actions, advertising issues or other information that results from activity conducted by the BBB.
annually you can call 1-877-322-8228 or visit this web site:
-Compare Good Faith Estimates. Specifically, review the estimated closing costs each lender has provided.
-Understand any fees that must be paid up front. Understand the terms for locking in an interest rate.
-During the application, check periodically with the lender to monitor progress.
If you are purchasing a home:
-Understand your real estate contract and deadline dates for the loan commitment, appraisal, inspection, and closing.
-Discuss locking in an interest rate; inquire about any fees.
-Know what your seller is providing towards closing costs, if any.
-Review your HUD Settlement document within 24 hours of closing to ensure that any fees and other issues are addressed prior to the actual closing.
If you are refinancing your current mortgage:
-Review your appraisal prior to closing to ensure the value isn't too high compared to other properties.
-Review your HUD Settlement document within 24 hours of the closing. Make sure that all financial terms of the mortgage agreed upon are posted on the settlement document along with other closing documents.
TO INQUIRE ABOUT LENDERS AND TO GET ANSWERS TO MORTGAGE-RELATED QUESTIONS, CALL THE COLORADO MORTGAGE LENDERS ASSOCIATION ON THEIR HELP LINE AT 1-800-611-4832 OR 303-773-9565.
The BBB recommends watching for the following signs when looking at mortgage company advertising and when applying for a home loan:
-Know the current lending rates: Low advertised rates are generally adjustable rate mortgages or ARMs where the rate and your monthly payment will fluctuate. Also, in general lower rates mean higher costs.
-Points & Fees: Most borrowers can expect to pay a 1% origination fee and possibly another 1% of the loan amount in points, as well as basic closing costs, which would include appraisal and attorney's fees. Some predatory lenders load up loans with these up-front charges and charge additional "junk fees" to pad the closing costs.
-No Cost Loans: No cost loans are generally higher interest rate loans. Estimate how long you will keep the loan; and decide where the balance is and what works best for you.
-Right to Rescind: Know that you have a three day rescission period after the closing to review your closing documents and to decide if you wish to keep the loan or turn it down. If the lender "promises" to change some items on the closing documents, make sure any changes are done in writing prior to the end of the rescission period.
-Watch for Predatory Lending: Loan offerings that cannot be repaid, regardless of the interest rates.
Remember to request disclosure of all of the terms, conditions, and costs of the loan; and to obtain a rate agreement in writing (generally referred to as a lock-in agreement).
Shop, Compare and Negotiate -But Move with Caution When Refinancing Your Mortgage