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
Two or more authorized brokers who agree to cooperate together representing a principal for the completion of a real property sale. ...
Securing lease commitments to a building prior to its being available for occupancy. For example, a developer offers a discounted lease to potential tenants providing they agree to sign a ...
Reduction in taxes payable to the IRS or local government. A tax credit is more beneficial to the taxpayer than an itemized deduction because it reduces taxes on a dollar-for-dollar basis. ...
Mortgage guaranteed up to 30 years by the Veterans Administration to veterans meeting minimum requirements. Originally established by the Servicemen's Readjustment Act of 1944, amended ...
Simply put, the meaning of purchase money mortgage is a type of seller financing. Explicitly, a home seller issues a mortgage to the borrower as part of the buying transaction without ...
Raising money by mortgages and borrowing the money directly from financial institutions. The presence of debt financing provides financial leverage, which tends to magnify the effects of ...
A lien on the property of a mortgagor. In most states a mortgage gives the mortgagee a lien-as opposed to the common-law practice of granting conditional title-on the house or property as ...
Combination of insurance policies on property with each providing an additional increment of coverage exceeding the limits of the preceding policy. For example, policy A adds $70,000, then ...
A reassessment or a reappraising is a decision or strategy made by the owner or the state or local authorities. The reassessment definition is a revision of an earlier assessment. Property ...
Have a question or comment?
We're here to help.