Solano Real Estate Scene: Mortgage broker vs mortgage banker: Pros, cons

A mortgage broker is a loan originator that processes loans and then submits their loan packages to a wholesale lender to underwrite and fund the loan. A mortgage banker is a loan originator that processes, underwrites and funds loans. There are mortgage bankers that can act as a broker and a banker. The benefit of being a mortgage broker is the loan officer can submit their client’s loan application to different wholesale lenders for a variety of loan products and mortgage rates based on the client’s needs and desires. The downside of being a mortgage broker is the possible lack or loss of control in the loan process because the underwriters and funders are not fellow employees of the loan originator. Most mortgage brokers are independent contractors. A mortgage broker is not a direct lender and the funds for the loan are coming from a third-party wholesale lender. The benefit of being a mortgage banker is the loan officer works for the mortgage company that is funding the loan and the underwriters and funders are all fellow employees of the loan officer and on the same team. This teamwork can produce faster service because all of the employees work for the mortgage company and their goal is to make the loan officer and the company look good. The downside of being a mortgage banker is the loan officer is limited to the loan products, lending guidelines and mortgage rates available at his or her employer. A mortgage banker that allows its loan officers to occasionally broker loans to wholesale lenders to meet the client’s needs and desires pretty much has the best of both worlds. As a manager of loan officers for nearly 30 years, I can tell you that the keys to being a great loan officer, whether a broker or a banker, is experience, effort, passion and an incredible over-the-top desire to serve their client.