History of Mortgage broker in Timeline

A mortgage broker is an intermediary who connects borrowers with lenders, finding suitable mortgage loans for individuals or businesses. They have become increasingly popular due to competitive mortgage markets, often acting as the largest sellers of mortgage products. In Canada, brokers are typically paid by the lender. In the US, mortgage brokers are often regulated by state and the CFPB to ensure compliance with banking and finance laws, with the extent of regulation varying by jurisdiction. Their primary role is to identify a lender willing to provide the specific loan a borrower needs.

1979: California Ruling on Fiduciary Duty

In 1979, the Supreme Court of California established fiduciary duties for mortgage brokers, setting an exception to the general lack of such duties in other states.

2002: Mortgages Under 25 Years

In 2002, the percentage of mortgages under 25 years in length was 95% according to figures from the Office for National Statistics (ONS).

2004: Mortgage Brokerage Industry Size

In 2004, a study indicated that there were approximately 53,000 mortgage brokerage companies in the United States, employing around 418,700 individuals and originating 68% of all residential loans.

2007: Lack of Fiduciary Duty

As of 2007, federal law and most state laws in the United States did not assign a fiduciary duty to mortgage brokers, except in California due to a 1979 ruling.

2008: Commission Realignment

In 2008, Australian banks introduced commission re-alignments in reaction to the Subprime mortgage crisis, causing commissions to vary significantly between different lenders and loan products.

2008: Mortgage Broker Loan Share

In 2008, approximately 35% of all loans secured by a mortgage in Australia were introduced by mortgage brokers.

2009: Mortgage Market Review Started

In 2009, The Mortgage Market Review (MMR) was initiated to conduct a comprehensive review of the UK mortgage market. The review concluded in 2012.

2010: New Good Faith Estimate

In 2010, the government introduced a new Good Faith Estimate to facilitate comparison of mortgage fees between mortgage brokers and direct lenders, aiming to address issues with inconsistent rate and fee disclosures.

March 2012: Mortgage Broker Loan Share

In March 2012, mortgage brokers in Australia introduced 43% of all loans secured by a mortgage.

2012: Decline in Mortgages Under 25 Years

Between 2002 and 2012, the percentage of mortgages under 25 years in length fell from 95% to 68%, as reported by the Office for National Statistics (ONS).

2012: Mortgage Market Review Concluded

In 2012, The Mortgage Market Review (MMR) concluded after conducting a comprehensive review of the UK mortgage market. The new rules came into effect in April 2014.

April 2014: Mortgage Market Review in Force

On April 26, 2014, the Mortgage Market Review (MMR) came into force in the UK, introducing stricter affordability requirements and income and expenditure checks, which significantly altered the lending environment.

2016: Changes in UK Regulations

By 2016, changes related to the Mortgage Credit Directive (MCD) meant that some borrowers in the UK, previously exempt from regulation, would be considered consumers and regulated, impacting transactions where borrowers occupied less than 40% of a property.

2016: Mortgage Broker Contribution to Economy

In 2016, mortgage brokers in Australia contributed to $2.9 billion to the Australian economy between 2016 and 2017.

2017: Increased Mobile and Online Technology

In 2017, Canada's mortgage industry experienced a move towards mobile and online technology, with CIBC beta testing a mobile app and companies focusing on consumer awareness against bank products.

2017: Mortgage Broker Contribution to Economy

In 2017, mortgage brokers in Australia contributed to $2.9 billion to the Australian economy between 2016 and 2017.

2019: Mortgage Broker Market Share

In 2019, mortgage brokers accounted for 59% of the mortgage market. However, the Hayne Royal Commission recommended ceasing upfront and trailing commissions to brokers, suggesting consumers pay an upfront fee instead. Industry lobbying successfully prevented the implementation of this fee-for-service model.