Question:

What types of real estate mortgage lenders exist?

Answer:

What kind of a real estate mortgage lender do you talk to when you need a home loan?

  • Mortgage brokers (MBs) serve as the middleman between the borrower and the lender. Mortgage broker businesses (MBBs) originate loans with the intention of selling them to wholesale lenders.
  • Mortgage bankers are able to originate a loan and keep it in their portfolio - they create a pool of loans and sell those to Fannie Mae, Ginnie Mae, Freddie Mac and private investors. Some brokers operate as correspondent lenders and are also referred to as mortgage bankers. A mortgage banker may be related to a bank, or may not.
  • Wholesale lenders are lenders who may or may not have a retail division. Rather, they rely on mortgage brokers for loan origination. Mortgage bankers and portfolio lenders act as wholesale lenders.

You are probably going to a mortgage broker when you need a loan; or, you could try the retail division of a large broker or lender, or bank.

Wholesale lenders don't work directly with consumers so you will have to pass through a mortgage broker. You could try using the services of an Upfront Mortgage Broker (UMB). They would work with you for a fixed charge and will pass wholesale rates to you.

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