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.
You can verify a credit union similarly using NCUA’s Research a Credit Union website.
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 2012 it originated over 5,000 conventional purchase loans and over 28,000 conventional refinances for 1-4 family units. It’s legit.
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:
- Mortgage Refinance: Which Lender?
- Mortgage Refinance: Tradeoff Between Rate and Closing Cost
- Mortgage Refinance: When to Lock?
- How Much Money Does a Bank or Broker Make From a Mortgage Refinance?
- Mortgage Refinance: What If Rate Drops After You Lock?
- Mortgage Refinance: Before and After Closing