How to Find Out If a Mortgage Company Exists
There have been cases where unscrupulous mortgage companies lure people in with promises of low interest rates, but then can't deliver. It's a form of "baiting and switching" with mortgage loans. The home buyers are trapped in the loan because it's unlikely that they will find other financing in time to purchase the home. To avoid this situation, it's very important that you do your research on the mortgage company. First of all, you need to find out if the company that they are representing actually exists. Some mortgage brokers who work out of their homes don't have an actual license to do business, so they are not traceable if something goes wrong. If the company does exist, you have to look into its reputation.
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Instructions
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Go to your state's business licensing website and do a search for the mortgage's business name. You can enter part of the name to ensure that you are getting a good set of results. Most state websites now keep a free online listing of business entities, including corporations, LLCs, partnerships, and registered sole proprietorships, since this is considered public information. See "Resources" below for a full list of state business websites.
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Walk into your state administration offices (usually located in the state capital) and request information paperwork on the business entity. You usually cannot get printed paperwork on the firm unless you pay a fee. You will need the full name of the business, address, and possibly the name of the owner or company representative.
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Go to the Better Business Bureau (BBB) and do a search for the business name (link below under "Resources"). While businesses are not required to list with the BBB, they are automatically listed if someone files a complaint against them. Companies are also encouraged to establish an account in good standing with the BBB to reassure potential clients.
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Search for the company on the Hoover's website. This site maintains a detailed listing of just about every legitimate company in the United States, including business information that you will probably want to look at.
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Tips & Warnings
Keep in mind that some sole proprietor businesses are not officially registered with the state. This is because unlike a corporation, the sole proprietor does not technically have to file paperwork in order to start doing business activities as a sole proprietorship (though a sole proprietor is still required to pay any applicable state taxes related to the business). If the mortgage company that you are looking into is not on your state's website or one of the websites mentioned above, they are either 1) brand new or 2) not an officially registered business. You may just want to move onto the next option to play it safe.
Resources
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