It is used to be somewhat easy to put a word to the lender that correctly described them and types of mortgages they originated. In this article we will see different types of mortgage lenders for the real estate transactions.
- Mortgage bankers: A mortgage banker is a lender and enough to originate the loans and create loans pools which they directly sell to jumbo loan investors, Ginnie Mae, Freddie Mac, Fannie Mae, and others. Any company which does this considered to be a mortgage banker. They are very largely in size. Some service loans they originate, but not all of them will. Wholesale lending divisions are having by most of the mortgage bankers.
- Mortgage brokers: Mortgage brokers are the companies which originate loans with a intention of brokering them to the wholesale lending institutions. With these companies brokers have established relationships. Funding and underwriting takes place at wholesale lender. Many brokers also correspondents, because many of them claim to be mortgage bankers.
- Wholesale lenders: Catering to mortgage brokers for loan origination, most portfolio lenders and mortgage bankers also act as wholesale lenders. Some of the wholesale lenders even don't have their own retail branches and relying solely on the mortgage brokers for loans. These wholesale lenders or divisions offer the loans to mortgage brokers at lower prices than their own retail branches offer to public. Then the fee will be added by the mortgage broker. So the loan costs same like obtained from a wholesale lender's retail branch.
- Portfolio lenders: The portfolio lender is an institution that which lends money of its own and originating for itself. These are lending for their own portfolio of loans and so they do not worry about being able to sell immediately on the secondary market. So, for determining credit worthiness they do not have to obey Freddie or Fannie guidelines and can create own guidelines. Generally these institutions are larger banks and loans & savings.
- Direct lenders: If the lenders are fund their own loans, considered as direct lenders. A direct lender can range anywhere from a very tiny one to the biggest lender. Savings & loans and banks obviously have deposits that they can use to fund the loans, but they usually use the warehouse lines of credit that which they draw dollars to fund the loans.
- Correspondents: The correspondents originates and closes home loans with their own name. They sell the loans individually to a larger lender or sponsor instead of selling in pools. The sponsor acts as the mortgage banker, reselling the loan to Freddie Mac, Fannie Mae or Ginnie Mae as part of pool.
Along with these Credit Unions Banks and Savings & Loans also acts as the mortgage lenders. Banks, savings and loans normally operate as mortgage bankers, portfolio lenders, or some combination of both. Credit Unions usually appear to operate as correspondents, although large one could act as a mortgage banker or a portfolio lender.
