First, let ‘s look at the mortgage banker. You negotiate directly with the company making your loan while you are doing business with a mortgage banker. Often, to describe a mortgage banker, the term direct lender is used. The mortgage banker may not be a mortgage servicer, which means that they will not actually be the entity where you make your mortgage payments, but it is their decision to decide if your loan meets the approval criteria. Although a mortgage banker is usually limited to the products they sell to borrowers, many mortgage bankers retain relationships with “wholesale” lenders where they can broker loans should their own mortgage loan deals not be met by a borrower ‘s request or borrowing profile.You may want to check out James Smythe – Dominion Lending Centres Central-Reverse Mortgage for more.
Mortgage banker subscribers typically make their choices in today’s mortgage market based on the criteria set by agencies (FHA, VA, Fannie Mae, Freddie Mac). The Mortgage Bankers Association of America is the trade association associated with mortgage bankers.
It is not entirely unreasonable to say that using a mortgage broker causes a middle-man effect (broker to lender to borrower), and to then conclude that this effect generates more costs for the borrower. In the retail world of loans, mortgage brokers do not do business. Many direct lenders have a wholesale department with the sole purpose of servicing the loans sent in by mortgage brokers, lenders that you can reach on your own. These divisions are widely referred to as wholesale lenders and offer pricing that is not publicly accessible and allow brokers to compete with mortgage bankers at the retail level. I think it is important to point out that a wholesale lender may cost unusually low on occasion to beef up their loan originations pipeline and a broker will be able to take advantage of this for you while a mortgage banker will not.