Back to Table of Contents

Types of Mortgage Lenders

Mortgage Bankers

Mortgage Bankers are lenders that are large enough to originate loans and create pools of loans, which are then sold directly to Fannie Mae, Freddie Mac, Ginnie Mae, jumbo loan investors, and others. Any company that does this is considered to be a mortgage banker.

Some companies don’t sell directly to those major investors, but sell their loans to the mortgage bankers. They often refer to themselves as mortgage bankers as well. Since they are actually engaging in the selling of loans, there is some justification for using this label. The point is that you cannot reliably determine the size or strength of a particular lender based on whether or not they identify themselves as a mortgage banker.

Portfolio Lenders

An institution that lends their own money and originates loans for itself is called a portfolio lender. This is because they are lending for their own portfolio of loans and not worried about being able to immediately sell them on the secondary market. Because of this, they don’t have to obey Fannie/Freddie guidelines and can create their own rules for determining credit worthiness. Usually these institutions are larger banks and savings & loans.

Quite often only a portion of their loan programs are a portfolio product. If they are offering fixed rate loans or government loans, they are certainly engaging in mortgage banking as well as portfolio lending.

Once a borrower has made the payments on a portfolio loan for over a year without any late payments, the loan is considered seasoned. Once a loan has a track history of timely payments it becomes marketable, even if it does not meet Freddie/Fannie guidelines.

Selling these seasoned loans frees up more money for the portfolio lender to make additional loans. If they are sold, they are packaged into pools and sold on the secondary market. You will probably not even realize your loan is sold because, quite likely, you will still make your loan payments to the same lender, which has now become your servicer.

Direct Lenders

Lenders are considered to be direct lenders if they fund their own loans. A direct lender can range anywhere from the biggest lender to a very tiny one. Banks and savings & loans obviously have deposits with which they can fund loans, but they usually use warehouse lines of credit for drawing the money to fund the loans. Smaller institutions also have warehouse lines of credit from which they draw money to fund loans.

Direct lenders usually fit into the category of mortgage bankers or portfolio lenders, but not always.

Correspondents

Correspondent is usually a term that refers to a company that originates and closes home loans in their own name, then sells them individually to a larger lender, called a sponsor. The sponsor acts as the mortgage banker, re-selling the loan to Ginnie Mae, Fannie Mae, or Freddie Mac as part of a pool. The correspondent may fund the loans themselves or funding may take place from the larger company. Either way, the sponsor usually underwrites the loan.

It is almost like being a mortgage broker, except that there is usually a very strong relationship between the correspondent and their sponsor.

Mortgage Brokers

Mortgage Brokers are companies that originate loans with the intention of brokering them to lending institutions. A broker has established relationships with these companies. Underwriting and funding takes place at the larger institutions. Many mortgage brokers are also correspondents.

Mortgage brokers deal with lending institutions that have a wholesale loan department.

Wholesale Lenders

Most mortgage bankers and portfolio lenders also act as wholesale lenders, catering to mortgage brokers for loan origination. Some wholesale lenders do not even have their own retail branches, relying solely on mortgage brokers for their loans. These wholesale divisions offer loans to mortgage brokers at a lower cost than their retail branches offer them to the general public. The mortgage broker then adds on his fee. The result for the borrower is that the loan costs about the same as if he obtained a loan directly from a retail branch of the wholesale lender.

Banks and savings & loans usually operate as portfolio lenders, mortgage bankers, or some combination of both.

Credit Unions usually seem to operate as correspondents, although a large one could act as a portfolio lender or a mortgage banker.

Back to Table of Contents

A Tale of 2 Home Sellers

Client Reviews
3675193
"Mark was very helpful in keeping us informed every step of the way..The house sold the very first weekend for $30k more than it was listed for, I ... more "
5.0/5.0
by susansoukup4964
3642089
"Mark was wonderful to work with. He was professional and attentive. He is a pleasure to communicate with and always available to answer questions. He ... more "
5.0/5.0
by angboz00
3581850
"Mark has sold 2 houses for us and has always been able to answer any questions quickly and accurately. He is patient, friendly, professional and knows ... more "
5.0/5.0
by user480131

 

Voted #1 - HQ Homes - 1% Flat Fee - Denver, Castle Rock & Douglas County, Colorado Real Estate

Welcome to the next generation of real estate service in Colorado - HQ Homes. HQHomes has been offering full service discounted flat fee real estate services for over 18 years serving thousands of satisfied customers whose savings total well over 1 million dollars.

Our Beliefs are "Treat the customer right - give them a GREAT deal and they will refer their friends and family

While it may seem pretty simple most corporate real estate companies don't get it, still charging high commissions.  At HQ Homes flat fee real estate we have a different philosophy - You are more than just another customer to us - you are a life long client, friend, and our best salesperson.

Buying a Home?

We reward our home buying clients with up to 1/2 of our commission*. Simply buy a home and we give you up to 1/2 of the commission* towards your closing costs with our home buyer rebate.

Selling a Home?

We only charge a 1% flat listing fee fee* to sell your home, providing our customers full service and a industry leading marketing package, giving you better service and marketing than those high commission competitors.

Almost everyone we talk to asks "What is the CATCH?!?" 

The catch is, if you buy a home without HQ Homes as your real estate company, without our flat fee you are giving away THOUSANDS of YOUR HARD EARNED DOLLARS.

There really is no catch, check out our great Zillow and Google reviews from our clients.

Call Today And Find Out Why We Were Voted The #1 Real Estate Company.

Our Home Buyer Rebate Program is the best you will find in the Denver or Castle Rock Colorado real estate markets. At HQ Homes we make the home buying process simple, fun and profitable to you with our home buyer rebate. If you are like many of today's savvy homebuyers, you are more comfortable doing the initial legwork and research. Perhaps you only want to engage a real estate pro when you are ready and on your terms. If this is you, then you are our ideal client! Please give us a call.

Almost everyone we talk to asks us how we can offer our service at such a low cost while other people are paying commissions up to 7 times what we charge.  The answer is very simple - VOLUME.  We determined that we would rather help more customers, which equates to a  bigger customer base who refer us more business, in turn lowering our costs of doing business. This decision has allowed us through our flat fee listing and home buyer rebate to pass these savings on to you, our clients. We continue leading the Denver real estate market into the next generation of real estate with the highest productivity and customer satisfaction rankings. 

Our clients are so impressed with us that the average client refers 3 new clients to us! That's the nex generation of real estate, treating your customers right!

*Subject to lender approval, RESPA  Act, and our legal disclaimer - We reserve the right to change the home buyer’s rebate program and home seller's program at any time for any reason without notice.