Dysfunctional Incentive Systems of Loan Providers

Most loan officers and mortgage brokers are only paid if a loan is closed, because borrowers tend to shy away from loan providers who charge for information services. There are a small handful of mortgage brokers who will refuse to refinance for a borrower who will not legitimately benefit from it, though the rest of the market is comprised of brokers who are bent on closing loans. These brokers reinforce the misinformed behaviors of borrower shortsightedness and meretricious mortgages, attempting to take advantage of these things to reap the benefits of a closed loan. The way to protect yourself from these sorts of brokers is to keep yourself informed, make sure that you completely understand the interest-only and option Adjustable Rate Mortgages. Also, make sure to take advantage of the three-day rescission policy to reconsider any refinancing deal.