Mortgage brokers back borrowers under new bill

OLYMPIA – As the economy suffers a downturn, as more Washingtonians wonder if their dreams of homeownership will in fact become nightmares, the Washington State Senate continues to do what it can to stand up for homeowners.

“At the peak of the subprime boom, a study published in the Wall Street Journal found that over half of the borrowers in subprime mortgages actually qualified for prime loans,” said Sen. Brian Weinstein, D-Mercer Island. “Brokers put borrowers in a higher rate because they make more money that way. Despite what borrowers believe, brokers are not always working in their best interest.”

Today, the Senate passed Senate Bill 6381, sponsored by Weinstein. The measure imposes a fiduciary duty on mortgage brokers – the legal responsibility for the mortgage broker to act in the best interest of the borrower. This is the same legal duty financial advisers, accountants and trustees owe to their clients.

SB 6381 passed on a 29 to 19 vote.

“This bill codifies borrowers’ expectations into law,” Weinstein said. “But most of all, it helps consumers make informed financial choices.”

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