Mortgage Brokers Overcharged Clients

April 9, 2008
Mortgage Brokers Overcharged Clients

More often than not, brokers placed borrowers with weak credit in loans with significantly higher interest rates than lender-originated mortgages, according to the study released Tuesday by the nonprofit, nonpartisan Center for Responsible Lending.

By tacking on additional percentage points to subprime borrowers' loans, mortgage brokers got rewarded in bonuses from lenders called "yield-spread premiums" that often totaled several thousand dollars and added thousands of dollars in payments to the borrower during the life of the loan, the study found.