Mortgage Co Broker Agreement: Understanding the Basics

In the world of mortgage lending, brokers play a crucial role in connecting borrowers with lenders. They help people find the right mortgage products and ensure a smooth closing process. However, brokers cannot operate without the proper legal framework in place. This is where the mortgage co broker agreement comes into play.

What is a Mortgage Co Broker Agreement?

A mortgage co broker agreement is a legal contract between a mortgage broker and a mortgage company that outlines the terms and conditions of their relationship. The agreement typically includes provisions related to compensation, disclosure of fees, confidentiality, and compliance with regulatory requirements.

Why is a Mortgage Co Broker Agreement Important?

The mortgage co broker agreement serves as a protection mechanism for both parties involved in the transaction. By clearly defining the terms of the relationship, the agreement reduces the risk of misunderstandings and disputes. The agreement also ensures that the broker is compensated fairly for their services and that the mortgage company is compliant with industry regulations.

What are the Key Components of a Mortgage Co Broker Agreement?

Compensation: The agreement should specify how the broker will be compensated for their services. This can be in the form of a flat fee, a percentage of the loan amount, or a combination of both. The agreement should also state when the broker will receive their payment and how it will be calculated.

Fee disclosure: The agreement should require the broker to disclose all fees associated with the loan, including origination fees, underwriting fees, and any other charges. This ensures that the borrower is fully aware of all costs associated with the loan.

Confidentiality: The agreement should contain provisions related to the protection of confidential information. This includes borrower information, company trade secrets, and any other sensitive data.

Compliance: The agreement should require the broker to comply with all industry regulations, including state and federal laws related to mortgage lending. This ensures that the mortgage company is not liable for any legal violations committed by the broker.


In summary, a mortgage co broker agreement is a vital component of the mortgage lending process. It protects both the mortgage broker and the mortgage company from misunderstandings, disputes, and legal violations. For brokers, having a signed agreement in place can provide peace of mind and ensure fair compensation for their services. For mortgage companies, the agreement can help to mitigate risk and ensure compliance with industry regulations.