Is a borrower who approaches a mortgage broker and has them originate an FHA loan on their behalf necessarily “bound” to that broker for the duration?

UPDATED: Aug 19, 2011

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Is a borrower who approaches a mortgage broker and has them originate an FHA loan on their behalf necessarily “bound” to that broker for the duration?

My wife and I are selling a house. Our agent approached us with an offer that we accepted. The buyer had been pre-qualified through a mortgage broker. Today was our scheduled closing date – a date that was agreed to by the buyer, the buyer’s agent and, to my knowledge, the broker and the lender. However, we just got a call from our agent saying that he had just received a call from the underwriter saying that the lender wants the buyer to meet one more qualification before they’ll reschedule the closing. This is the 2nd time this has happened in this deal. Can we ditch the broker?

Asked on August 19, 2011 Michigan


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In your situation you most likely signed a listing agreement with the real estate brokerage to represent you in the sale of your home for a certain period of time where you agreed to pay acertain commission for the services if a willing buyer was brought.

The mortgage broker for the buyer has nothing to do with you directly. The mortgage broker is trying to get a loan for the buyer. I understand your frustration regarding the delay in closing, but you cannot force the buyer to eliminate the mortgage broker.

The problem is not the mortgage broker for the loan. The problem is underwriting of the loan and final approval by the lender. The mortgage broker just shops a loan application of his or her client to various lenders. The lenders then make the decision in approving the loan or not.


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