Summary:
A fiduciary duty binds California real estate brokers to facilitate property loan transactions with private-party investors.
This duty requires the broker or agent to disclose all material facts and investment risks, whether known or should have been known.
This includes facts discovered during the loan processing or underwriting
The investor's decision to invest in a proposed loan transaction will involve reviewing the material disclosure package, including the investment risks, and providing a written affirmation about their background, knowledge, and experience to ensure the contemplated transaction is suitable.
Brokers and agents, with their unique expertise and years of experience, are the linchpins of private money loan transactions. Their pivotal role ensures the smooth and fair execution of the deal. A procuring loan broker, a trusted borrower's agent, is responsible for making or arranging the loan with the expectation of compensation. This means they are the ones who secure the loan for the borrower. Their unparalleled expertise and experience provide a solid foundation for successfully executing loan transactions, reassuring you that your transaction is in the most capable hands.
Article:
An independent and distinct mortgage broker is a crucial link between private-party investors and borrowers. It serves as the 'middle person' or 'coordinator' and arranges privately funded loans. This mortgage broker is responsible for facilitating the loan transaction, usually using the investment capital of third-party private lenders.
As a fiduciary of the private investor parties, the broker is not just tasked with protecting the client's best interest but is deeply committed to it, ensuring the utmost security for your investments. This unwavering commitment to the client's best interest is a cornerstone of the fiduciary duty, providing a solid sense of reassurance for the client's investments and peace of mind for the investor.
Sometimes, the broker may act as a dual agent for both parties, requiring the highest level of professionalism and a deep understanding of the 'laws of agency.' These laws dictate the broker's responsibilities and obligations to both parties, ensuring a confident and smooth transaction for all parties involved and instilling a sense of trust in the broker's abilities. The professionalism and deep understanding of the 'laws of agency' ensure a smooth and confident transaction for all parties involved, giving you the confidence that your transaction is in the most capable hands.
https://www.consumerfinance.gov/ask-cfpb/what-is-a-fiduciary-en-1769/