An entity that lends money in return of real property security interest. Lenders provide loans for many purposes but mortgage lenders are usually associated with real estate loans.
Types Of Mortgage Lenders
Mortgage lenders are divided into various categories according to their functions, some provide loans for small homes and shops. There is a new breed of online mortgage lenders who do not have their office or any contact in real. They only provide loans online and disrupting the real mortgagors.
- Mortgage bankers
- Portfolio mortgage Lenders
- Retail mortgage Lenders
- Wholesale mortgage Lenders
- Correspondent mortgage Lenders
- Subprime Mortgage Lenders
- Loan Officers
- Direct mortgage Lenders
Bankers are the primary sources of mortgage lending that create their own schemes and shift them to secondary markets in pools to investors. There maybe non-depository institutions which sell their loan schemes quickly in the secondary markets. Banks may expertise in refinancing the mortgage and may be engaged in providing loans for constructions.
Portfolio Mortgage Lenders
Portfolio mortgage lenders fund their own loans by compiling funds from different sources. They fund without letting up and are able to hold the loans. They offer savings accounts to their customers therefore, they have enough funds for mortgage lending. They are more flexible because they facilitate mortgage underwriting.
Retail Mortgage Lenders
Retail mortgage lenders are engaged in performing all the functions by their own self, correspondent or brokers do not perform any task for these type of lenders.
Wholesale Mortgage Lenders
Wholesale mortgage lenders are engaged in providing same services as mortgage bankers provide. They sell loans in the secondary market, they are different ones because independent mortgage brokers are providing the services and are facing the clients. Brokers and correspondents provide them some services to accomplish the functions properly.
Correspondent Mortgage Lenders
Mortgage lenders engaged in originating and lending in their own names are called correspondent mortgage lenders. They originate loans and sell to numerous mortgage lenders who in turn sold it on the secondary market. If they are empowered to underwrite the loan, they can do so in-house. They are the extension for larger lenders and have a variety of products from different sponsors.
Subprime Mortgage Lenders
Lenders who are risk tolerance and are always willing to take the high risk to get high rewards, they focus more on homeowners. Their mortgage rates are much higher than the other lenders those are at standard. All other mortgage lenders have approximately equal rates.
Employees working under or with retail banks or mortgage brokers are loan officers. They work like brokers, they can work even without having a license which totally depends upon the institute in question. They are not well experienced, banks usually employee the loan officers who do not have enough training except some computer programs to accomplish sale tasks.
Direct Mortgage Lenders
These mortgage lenders do not involve any middlemen or broker in any dealing and are directly engaged with a homeowner and underwrite their product in-house. Mortgage bankers and portfolio lenders are normally called direct mortgage lenders because of their direct communication and dealing with the mortgagee.