What do Mortgage Companies doHow do mortgage banks do it?
What are mortgage banks like?
Then there are mortgage brokers, mortgage banks and then there are mortgage providers. These three most frequent types of mortgage banks differ considerably. You are all concerned with the provision of mortgage credit, but a main distinction is where the mortgage funding comes from. Mortgage brokers don't have their own cash to borrow.
You take the request from the user who wants the mortgage, then they "buy" this transaction around among various mortgage brokers or straight forward creditors. Provided the request complies with the bank's or lender's instructions, the agent is offered the possibility of granting a mortgage to the person making the request.
Although the mortgage brokerage firm can be named XYZ and is who the customer is facing, the real cash comes from a bankier or creditor where the customer sends his or her monthly payment. Brokers have just placed themselves between the borrowers and the lenders and earn their living in the shape of a commission with points and issuing commission.
Mortgage bankers, however, who are also promoted as mortgage banks, will also take a consumer's request, but instead of looking for a creditor who accepts them, they will supply the funds themselves that they can obtain from a line of credit they already have. The line of credit, which could be in the region of several million euros, can be provided by a creditor who allows the bankier free cash in order to grant a mortgage provided that the debtor complies with the rules laid down by the creditor.
Loans are then usually taken out under the name of the mortgagee. Then, usually before an initial instalment is due, the bankier transfers the mortgage over to the creditor who provided the line of credit. However, the mortgage cannot be repaid until the first instalment has been paid. The system allows the banker to act faster than a brokers and, in some cases, to have so-called "delegated underwriting" where he can make his own individual decision on the basis of the lender's policy, which saves the bank from having to send the transaction to the creditor for verification.
It is the hypothesis that once the loans are concluded, the creditor who has provided the loans takes over the service of the loans and the consumers make direct payment to the creditor, and the bankier is out, of course with a gain for points billed to the consumers.
Lenders can also make points available to the Bank, e.g. volumes. Sometimes the borrower can even be provided with a line of credit from another borrower than a borrower, and in this case the borrower can resell the mortgage to any of the parties who will buy it.
However, if they cannot find a purchaser, they are bound by this mortgage and must recover the amount due each month from the customer and must repay all interest due on the line of credit until the amount due on the line of credit has been repaid. After all, there is the straight line financier who has his own funds and draws up his own rules for mortgage lending.
You may be involved in various mortgage-related activities, which may involve working together in wholesaling, delivering mortgage lending to the consumer through a broker or bankier, delivering line of credit services and delegation of authority, or working directly with the consumer counterparty and eliminating them.
Wherever a mortgage credit is taken out by a user, regardless of who ultimately owns it, the conditions of the credit cannot be changed. Not uncommon for a credit to be repeatedly bought and paid during its life.