Question:

What is a direct lender?

Answer:

Borrowers would like to know what is a direct lender so as to distinguish them from brokers. A direct lender can be everyone who funds their own loans and does not use a middleman in dealing with homeowners. A direct lender can be a very small, or a very big lender. Everyone who utilizes their own line of credit to extend credit to borrowers is a direct lender.

Direct lenders can fit into the description of portfolio lenders and mortgage bankers and those usually have retail divisions to serve applicants.

It is difficult to know right away who is a direct lender or a mortgage broker, since mortgage brokers can always arrange paperwork as if they fund loans in their name. Basically, anyone who is not a broker would be a direct lender. Direct lenders will vary from the biggest ones - portfolio lenders, banks and savings & loans, to unions to small lending companies utilizing warehouse lines of credit, to correspondent lenders.

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