Mortgage Refinance: Is Your Lender Legit?

When you see a mortgage offer from a place you are not familiar with, you may be concerned whether it’s a legit business or a scam. When you apply for a loan, you have to give out a lot of personal information . You don’t want to give those information to a scammer doing identity theft. How do you know they are legit?


If the prospective lender is a bank, you can try finding it in FDIC’s directory. For example I’m using First Internet Bank of Indiana. I see it in FDIC’s directory. It’s been FDIC insured since 1998. Previously I used National Mortgage Alliance, which is a division of Georgia Banking Company. Georgia Banking Company is also a FDIC-insured bank.

After you find the bank in FDIC’s directory, you can see many links to other data about the bank. The Summary of Deposits link shows you how big the bank is. The latest report shows First Internet Bank of Indiana had $454 million in deposits. Georgia Banking Company had $182 million in deposits. By comparison Bank of America had $914 billion in deposits, some 2,000 to 5,000 times the size of the two small banks I used respectively.

Credit Unions

You can verify a credit union similarly using NCUA’s Find a Credit Union webpage. Fellow blogger indexfundfan used Star One Credit Union. I see it’s been insured by NCUA since 1971 and it has $5 billion in assets.

Mortgage Companies

The lender can be just a mortgage company, not a bank or credit union. These companies report their mortgage activities to Federal Financial Institutions Examination Council (FFIEC) under the Home Mortgage Disclosure Act (HMDA). You can find mortgage companies (and banks and credit unions) in FFIEC’s HMDA disclosure database.

When I shopped my mortgage refinance, I also considered a company called AmeriSave, officially AmeriSave Mortgage Corporation. From the HMDA reports, I see in 2008 it originated 505 conventional purchase loans and 3,100 conventional refinances for 1-4 family units. It’s legit.

Mortgage Brokers

If you are considering a mortgage broker, you can see if they are a member of National Association of Mortgage Brokers (NAMB). NAMB has a find a NAMB broker listing. I’m able to find the mortgage broker I worked with in the past.

Department of Real Estate in your state licenses mortgage brokers. You can verify the broker’s status on your state’s Department of Real Estate website. I can see from my state’s Department of Real Estate website that the broker I used before has been licensed since 1988. There were no disciplinary actions against him.

This is part of a "How to Refinance" series of posts. Other posts in the series include:

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  1. Ace says

    I assume First Internet Bank of Indiana does not service mortgage loans itself, correct? Has your loan been sold to a third party? If so, who?

  2. Celtic86 says

    FIB of Indy sells 100% of their loans. ‘Who’ remains to be seen once your loan is about to close. Likely one of the usual suspects (Wells Fargo, BofA, Chase, etc.).

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