Are mortgage Brokers honest with first time home buyers?

First home buyers are using mortgage brokers and as a first home buyer you need to know if the mortgage broker is acting your best interest or not.
Mortgage brokers are in the firing line of late, and now Westpac bank and the Commonwealth bank are putting pressure on accredited mortgage brokers, telling them that if they don’t have a certain number of loans settle with them within a 6 month time frame, they will lose their accreditation with the lender.
The mortgage brokers have responded by saying that their “Independence” is in jeopardy, because many brokers will bow to the pressure and set loans for clients for the first time home buyers with these lenders, rather than the best loan for the customer.
In my prior article I was a little harsh on these brokers, and this brought up the question of honesty of the Mortgage brokers.
So here is my revised take on this important topic.
The Mortgage Brokers Intent indicates his or her honesty.
Honesty should not be taken on a legal or literal definition of the relationship between the mortgage broker and the lender and the first home buyer in my view, but on the intent of the mortgage broker when they are helping their customer select the best loan for them.
If the Mortgage Broker has the intention of always selecting the very best mortgage lender and mortgage loan product for their customer, then its obvious that the mortgage broker can be considered an honest mortgage broker.
If the Mortgage broker explains to the first time home buyer that they are offering a no cost loan service to them, because the lenders are paying them a commission for introducing the loan to the lender, they are being honest in my view.
If on the other-hand the mortgage is selected favours the mortgage broker and his or her own personal interest, then the mortgage broker would have to be considered dishonest in my opinion.
Banks and other mortgage lenders that offer lenders inducements to put loans through them, compromise the brokers’ impartiality. So do lenders that force lenders to have sales targets. Doing so it seems to me makes mortgage brokers appear commission representatives of the lender.
That has to be a bad thing for the mortgage broker industry and the first home buyer that places their trust in a Mortgage Broker to do the right thing by them according to Mr Mortgage.

First Time Home Buyers make new home sales sag

As First time home buyers retreat to the sidelines sales of new homes have sagged, breaking a four-month streak of gains in Australia's housing industry.
Figures from the Housing Industry Association (HIA) show total sales of new homes dropped a seasonally-adjusted 5.7 per cent last month.But sales in the apartment sector rose 6.1 per cent in May, reversing a fall in April.
Overall, sales were still up 15 per cent from their low point in December. The association says some of the reduction in new home sales could have been linked to negative speculation about the Federal Budget.
It is expected to convert to a recovery in home building activity from the June quarter of 2009 HIA senior economist Ben Phillips says the combination of low interest rates and the $21,000 first home boost lifted prospects for the industry. "The vast majority of the housing recovery has been at the first home buyer end of the market," he said."As that segment inevitably slows over the remainder of 2009, it's vitally important that the much larger trade-up and investor segments return to health."
Mr Phillips says first home buyers cannot fill the hole in home building on their own."There are other markets - mainly the change-up market and the investor market, which are the majority of the residential new homes market, and they're still running at really just a trickle," he said."So as the first home buyer grant cools over the coming six to 12 months, we're likely to see some poorer numbers start to flow through."