Mortgage Banker
Definition of "Mortgage banker"
Mortgage banker is the person or business that originates mortgages and receives payments.
The mortgage banker typically sells these mortgages to investors and obtains service fees for the loans. The mortgage banker is a major initiator of Federal Housing Administration (FHA) and Veteran Administration-insured mortgages and also serves a key function in the conventional mortgage markets.
Financial help is often sought from a lender, typically a commercial bank. The bank becomes a warehouse for mortgage money, and the mortgage banker draws on these funds until payment is received from the investors. Usually, the mortgage banker continues to service the loan even after the loan has been packaged and sold. For this management service, a small percentage of the amount collected is retained before forwarding the balance to the investor.
The success of the mortgage banker depends upon the ability to generate new loans. In some geographic areas, mortgage bankers are the primary source for financing real estate. All mortgage bankers try to stay in constant touch with investors and are aware of changing market conditions and lender requirements. Quite often the loan origination fee or finder's fee charged the borrower is more than offset by a lower interest rate from a lender not directly accessible to the borrower.
Mortgage bankers are involved in both commercial and residential financing and also carry out related activities such as writing hazard insurance policies, appraisals, and investment counseling. As with mortgage brokers, mortgage bankers are regulated by state law.
Popular Real Estate Terms
Generic name given for any association of property owners sharing an interest in commonly owned property. Community associations may be developed in condominium, cooperative, or housing ...
The land-to-building ratio is a means to calculate in percentage how much a structure occupies the total land parcel on which it is located. It is the total building area as a percentage of ...
Individual who gives false statements under oath, which is a criminal act punishable by imprisonment and fine. An example is signing a tax return that fraudently understates rental income, ...
Loan such as a mortgage that the borrower has consistently made payments on when due over many years. The borrower has proven his creditor worthiness. ...
Owned by one individual or sole ownership. ...
Affordability is a term used to describe the ability of a person or entity to pay in relation to the income earned by them. Affordability is the comparison of a person's income against ...
The word’s etymology reflects several diverse or seemingly unrelated topics under the same umbrella. As part of everyday discourse, you’ll find the term “omnibus” ...
To understand the definition of the term demised premises, one must understand what demise means. Because demised premises is a widespread use for the term demise. The demised premises ...
Amount the taxpayer gets back when he or she files the tax return at the end of the reporting year because taxes were overpaid for that year. The tax overpayment equals the tax payments ...
Have a question or comment?
We're here to help.