The Real Estate Settlement Procedures Act (RESPA) protects homeowners from abusive lending practices by requiring mortgage lenders to disclose all of the fees associated with their loans. The problem with taking out a mortgage from your Bank is that they are not required to disclose any of this markup due to loopholes in the Real Estate Settlement Procedures Act. Your bank is not legally required to disclose anything beyond the Annual Percentage Rate of your mortgage. RESPA laws in the United States protect you by requiring mortgage lenders to disclose their profit margin and markup on your loan.



The problem with taking out a mortgage from your Bank is that they are not required to disclose any of this markup due to loopholes in the Real Estate Settlement Procedures Act. Don't expect bank employees to admit their rates are inflated; most bank employees know very little about mortgage rates and will swear the bank rates are not marked up. Simply compare bank rates to those offered by a wholesale mortgage broker and you will quickly understand why bank originated mortgage loans are a bad idea. By buying an undervalued property and then reselling it at its appraised value, vis-à-vis current market values, an agent can earn thousands of dollars in profits.

Banks earn a premium on the secondary market by charging Service Release Premium, and here’s how it works. Banks are exempt from RESPA laws due to a loophole created by the banking lobby. This markup of your mortgage interest rate is called Service Release Premium and banks charge this to boost their profits when selling your mortgage to investors on the secondary mortgage market.

The bottom line is that your bank will not be less expensive than other options; your bank will always overcharge you for the mortgage loan. There many people, some are housewives and once-a-week agents who have earned a lot from making the buying and selling of foreclosed properties a hobby. To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below. In addition to having fewer choices, your bank is much less likely to negotiate over interest rates and fees.

Here are several reasons why you should never take out a mortgage loan from your bank. The Banking Lobby spent millions of dollars to have this law changed excluding banks from disclosure requirements. The Real Estate Settlement Procedures Act or RESPA for short protects homeowners from predatory lending practices by requiring mortgage lenders to disclose their fees and broker markup of your mortgage interest rate.

Now you might be asking yourself how RESPA factors into this. In addition to having fewer choices, your bank is much less likely to negotiate over interest rates and fees. This means the bank can literally charge you whatever they like and no one is the wiser.

To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below. Bank mortgage loans are often called “correspondent loans" because after the banker completes your mortgage that bank will immediately turn around and sell it on the secondary market. You can learn more about finding the best mortgage loan without overpaying by registering for a free mortgage guidebook.

Banks do the same thing to make money selling the loans on the secondary market. You can learn more about your mortgage refinancing options, including costly pitfalls to avoid by registering for a free mortgage DVD. Bank mortgage rate sheets also have Service Release Premium built into their interest rates.