Loan Brokers and Agents: as fiduciaries

Loan Brokers and Agents: as fiduciaries

By Dan Harkey

Brokers and agents play a crucial role in private money loan transactions, ensuring the smooth and fair execution of the deal.

A procuring loan broker, a trusted borrower agent, is responsible for making or arranging the loan with the expectation of compensation.  The broker’s role as a fiduciary is to always act in the best interests of their client, the borrower, ensuring a secure and beneficial transaction.

A separate and distinct mortgage broker is a crucial link between private-party investors and borrowers, arranging privately funded loans.  This mortgage broker, often referred to as the “middle person” or “coordinator," is responsible for facilitating the loan transaction, often using the investment capital of third-party private lenders.

The broker is a fiduciary of the private investor parties and is tasked with protecting the client’s best interest.

At times, the broker may act as a dual agent for both parties, a role that requires utmost professionalism and a deep understanding of the 'laws of agency.' This ensures a confident and smooth transaction for all parties involved.

Thank you

Dan Harkey

Educator and Private Money Lending Consultant

949 533 8315 dan@danharkey.com,

Website www.danharkey.com