According to regulations, which type of loans cannot be issued by brokers?

The correct answer is that brokers cannot issue consumer loans. This stems from regulations that impose restrictions on mortgage brokers regarding the type of financing they can provide. Typically, brokers serve as intermediaries between lenders and borrowers, facilitating the loan application process but not actually funding the loans themselves.

While brokers can assist in securing various types of loans, consumer loans often pertain to personal credit, unsecured loans, or similar financial products that are not always governed by the same stringent guidelines that apply to mortgage lending. Therefore, consumer loans are typically issued directly by lenders, and brokers play a different role in those transactions.

In contrast, home equity loans, commercial loans, and construction loans generally can be arranged through brokers, as these fit within the scope of services that brokers are allowed to provide. By understanding these distinctions, individuals preparing for a mortgage loan originator role can better navigate the regulatory environment and the services that can be offered by brokers.