What they don t tell potential borrowers is that they will be paying more and longer. Worse yet, they will be entering a system that promotes a cycle of debt that has been compared to sharecropping, an economic system that is unequal and unfair. Mortgage brokers often claim they have no responsibility to find borrowers a good loan. They operate on the financial world s unregulated fringes, in an environment that has been called the wild, wild west of capitalism. In many states, brokers need only register with the state without taking a licensing exam or showing any proof of training.
Cosmetologists have higher licensing standards than mortgage brokers in North Carolina.
A mortgage broker that violates lending laws can simply close shop and re-open under a different name. The mortgage broker also tried to sell Green credit life insurance, another common financial service that is generally only sold on subprime loans. If Green should die, the credit life insurance policy would pay off some of the principal left on the loan. Green decided not to buy the insurance because it was too expensive, but the mortgage broker slipped the credit insurance papers into the stack of closing documents and Green signed anyway. This means that Green will be paying for 30 years on a life insurance product that is only good for five.