Why Mortgage Bankers Don’t Have to Tell You What They Make — But We Do

By Ken Turkington & Kirk Chivas — Co-Founders, First Commerce Financial | NMLS #137512

Here is something most borrowers never find out: your mortgage banker is not required to disclose what they make on your loan. Not on your Loan Estimate. Not at closing. Not anywhere. They can build their entire compensation into your interest rate and never tell you a single dollar amount.

Your mortgage broker? Required by federal law to show you exactly what we make — right there on page two of your Loan Estimate. Every time. No exceptions.

We have been originating mortgages since 1997. We built Pioneer Mortgage into Michigan's second largest lender. We ran operations at Sallie Mae Home Loans. And in 2007 — when we founded First Commerce Financial — we chose the independent broker model specifically because it was the only model that required us to be fully transparent with every client we served.

That was not an accident. It was a decision. And it is one we have never regretted.

What the Law Actually Says

The Mortgage Disclosure Improvement Act requires mortgage brokers to disclose their compensation on the Loan Estimate — as a specific dollar amount, in black and white, before you sign anything.

Mortgage bankers and banks are specifically exempt from this requirement.

Read that again: the people telling you they are more transparent because they "lend their own money" are the same people who are legally permitted to hide what they make on your loan. Brokers — the so-called middlemen — are the ones required to show you everything.

This is not a technicality. It is a structural difference in how these two business models operate — and it has a direct impact on your rate and your total closing costs.

How Mortgage Bankers Actually Price Your Loan

Here is what actually happens when a mortgage banker quotes you a rate:

Each morning, they aggregate rates from multiple wholesale investors into one internal rate sheet
They add a margin on top of those rates — this is their profit
That margin is built into the rate you are quoted — invisible to you
Their loan officers often have a floor they cannot go below — set by company policy to protect margin
None of this appears on your Loan Estimate as a line item

When they tell you they "lend their own money" — what they mean is they fund loans using warehouse lines of credit before selling them to investors on the secondary market. That is not lending their own money in any meaningful sense. It is a talking point designed to make you feel like you are getting something special. You are not.

How We Price Your Loan

As independent brokers, we access the same wholesale market that mortgage bankers pull from — but we shop it across 20+ lenders simultaneously, in real time, on every single loan. No consolidated rate sheet. No internal margin floor. No company policy telling us we cannot go below a certain number.

Ken and Kirk own this company. We set our own compensation. And because we are required to disclose it on your Loan Estimate, you always know exactly what we make — and you can compare it against anyone else's offer.

On page two of your Loan Estimate from First Commerce Financial you will see a line item showing our exact compensation — to the dollar. You can take that number to any other lender and compare it directly. That level of transparency is not something mortgage bankers offer. It is something brokers are required to provide.

The "Their Money" Myth — Put to Rest

The most common line mortgage bankers use is some version of: "We lend our own money, so we have better rates and faster closings."

Let's address both claims directly.

Better rates?

Mortgage bankers borrow from warehouse lines of credit — not their own capital. They access the same wholesale market we do. The difference is they mark it up before quoting you, and they do not have to tell you how much. We shop that same market across 20+ lenders and show you exactly what we make. In almost every scenario, the broker wins on rate.

Faster closings?

Brokers submit to the same underwriting systems and often the same investors that mortgage bankers use. The difference is we can move your loan to a different lender if one has a bottleneck. A mortgage banker is locked into their own pipeline. We are not. That flexibility protects your closing date.

— Ken Turkington & Kirk Chivas, Co-Founders, First Commerce Financial

We have been doing this since 1997. We have seen every version of this conversation. And the one thing that has never changed is this: the broker model — with its required compensation disclosure, its wholesale rate access, and its ability to shop multiple lenders — almost always produces a better outcome for the borrower than the mortgage banker model.

We stayed independent through the financial crisis. We stayed independent when competitors chased higher margins by moving to the banker model. We are still here. And we are still required to show you exactly what we make. That is not a coincidence — it is the whole point.

What to Look for on Your Loan Estimate

If you have a Loan Estimate from a mortgage banker or bank, pull it out and look at Section A — Origination Charges. You will see their fees listed there. What you will not see is their total compensation — because the rest is buried in the rate itself and they are not required to show it to you.

Now pull a Loan Estimate from us. Section A will show our compensation as a specific dollar amount. You will know exactly what we make. You can compare it. You can negotiate it. Nothing is hidden.

That is the difference. And it is a difference worth understanding before you sign anything.