Those days are gone when it was fairly easier to define the real estate mortgage lenders with an appropriate term. That term was also useful to understand which types of mortgage loans they offered. With the passage of time, demand in marketplace has undergone a huge change and in response to that, differences of lenders have also blended to some extent.
Most of the prospective borrowers looking for real estate mortgage loans are laymen. They are unaware of different terms that define the mortgage lenders and their activities. As a result, they approach the wrong persons for getting a loan. It is important that they educated themselves regarding different types of persons associated with real mortgage lending so that they can make an informed choice.
Here are a few terms that used to apply to the real estate mortgage lenders along with in-brief descriptions about the type of their work.
A mortgage banker is a powerful title applied to those who have enough cash reserves to originate a pool of loans and can sell them directly to Freddie Mac, Fannie Mae, Jumbo and Ginnie Mae loan investors. The lending companies which act as mortgage bankers are different in sizes. Remember that not all of them do not service the loans originated by them. Most of the time, the true mortgage bankers own a wholesale lending division.
Wells Fargo and Countrywide Home Loans are the two largest mortgage bankers. One of them is known to have its association with bank while other has no such link. However, both of them are, at present, categorized as mortgage bankers.
For the potential mortgage borrowers, it is important to know that most of the companies claim themselves as mortgage bankers but in reality a few of them can be categorized under the title whereas the rest are associated with only marketing.
They are most popular in the real estate mortgage industry. They refer to those companies that originate loans with a view to broker them to the wholesale lending houses. A mortgage broker always set us relationship with these wholesale lending companies. The mortgage brokers always deal with those lending institutions which have a wholesale loan division. Many of the mortgage brokers also serve as correspondents and that is why they often claim them as mortgage bankers.
Most of the portfolio lenders and mortgage bankers also juggle the role of wholesale lenders. They serve to the purpose of mortgage brokers involved with loan origination. Some of these wholesale lenders do not own retail branches and solely rely on the mortgage brokers to offer their service for loans.
The advantage of directly dealing with the wholesale division is it provides loans to the mortgage brokers at much a cheaper rate than what general public is offered by the retail branches. The mortgage brokers charge for their service. From the borrowers’ angle, the loan is as costly as it could have been if directly sourced from the retail branch of a wholesale lender.