A mortgage banker is, and may actually be, a separate company completely unaffiliated with any other company, thing or any entity which is perceived or known or inferred to have its own distinct existence (living or nonliving) for the purpose of originating loans. :-)
This is a thing which, by the nature of it's own existence, needs to have enough of it's own capital to buy, sell and service the loans it makes.
This very fact alone is a determining factor as to whether or not investors in the secondary mortgage market will have anything to do with it (help me with this one, loan pros).
Also, because of this fact the mortgage banker usually has some kind of a connection with another source of money like a bank (duh), a credit union, an insurance company or maybe even Walmart or some other humongous retail store.
Mortgage Bankers work real closely with what we commonly refer to as the secondary mortgage market selling the loans it makes to investors or creating securities backed by the loans it makes called mortgage backed securities.
The mortgage bankers have the distinction of being able to fund and close the loans on their own and, at their discretion, hold on to them until they're sold off.
They can also buy loans from other sources and pool them with any of their own loans and sell them into the secondary mortgage market as well.
I could fill up library stacks with information about mortgage backed securities, or MBS for those interested in the technologistics of the trade.
When mortgage bankers buy loans from other lenders they generally do this through an entity they create called a wholesale division.
This gives the mortgage banker the opportunity to get their hands on loans at reasonable prices without having to shell out cash to an originator, and frees up the money they need to make more loans. Wow, who would have thought of that !
What else can you tell Active Rain about the Mortgage Banker?
What are your experiences either as a mortgage banker or an investor working closely with mortgage bankers?
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