Final answer:
A mortgage broker originates loans and connects borrowers with lenders. They must have a separate license and are regulated by authorities.
Step-by-step explanation:
A mortgage broker originates loans and is responsible for connecting borrowers with lenders. They act as intermediaries between the borrower and the lender, helping the borrower find the best mortgage product and guiding them through the application and approval process.
Mortgage brokers are not the same as mortgage bankers. While both are involved in the mortgage lending process, mortgage bankers work for a specific lending institution and use their own funds to provide mortgages, while brokers work independently and connect borrowers with multiple lenders.
In order to operate legally, mortgage brokers must have a separate license from the state in which they operate. They are also regulated and supervised by the appropriate authorities to ensure compliance with laws and regulations pertaining to mortgage lending.