California Mortgage Information
California Mortgage Brokers and California
Mortgage Lenders
About California Mortgages
Advantages of California Mortgage Broker and California Mortgage
Lenders
The major strength of California mortgage brokers is that they can
shop the wholesale lenders for which lender has the best rate much
easier than a borrower can on his own. They also learn the "hot
points" of certain wholesale lenders and can handpick the lender for a
borrower which may be unique in some way. He will be able to advise
you whether your loan should be submitted to a portfolio lender or a
mortgage banker. Another advantage is that, if a loan gets declined
for some reason, they can simply repackage the loan and submit it to
another wholesale lender.
One additional advantage is that California mortgage brokers tend to
attract a high number of the most qualified loan officers. This is not
universal. Mortgage brokers also serve as the training ground for
those just entering the business.
Types of California Lenders
There are 3 main sources of California mortgage lenders: banks,
savings and loan associations (S&Ls), and mortgage brokers. In the
past, lenders were almost exclusively banks or S&Ls. Today, many
different types of lenders have jumped into the field of mortgage
lending.
California Mortgage Bankers
A true Mortgage Banker is a lender that is large enough to originate
loans and create portfolios of loans which they sell directly to
Fannie Mae, Freddie Mac, Ginnie Mae, and other loan investors. A
company that does this is considered to be a mortgage banker.
California Mortgage Brokers
California Mortgage Brokers are companies that originate loans with
the intention of brokering them or "selling" them to wholesale lending
institutions. A California mortgage broker has established
relationships with these companies. Underwriting and funding takes
place at the wholesale lender. Many California mortgage brokers are
also correspondents, which is why many of them also claim to be
mortgage bankers.
Mortgage brokers deal with lending institutions that have a wholesale
loan department.
Wholesale Lenders
Most California 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.
What kind of lender is "best?"
If you talk to a loan officer, he (or she) will probably say the
mortgage lender they work for is "the best" and give you a list of
reasons why. If you meet the same loan officer years later and he
works for a different kind of lender, he will give you a list of
reasons why that type of lender is better.
Realtors have differing opinions and, as a group, their opinions have
changed over time. In the past, most would often recommend portfolio
lenders - because they almost always closed the deal. As time passed,
mortgage bankers and mortgage brokers became more important, and
agents switched along with the changing times.
Most often a Realtor will direct you to a specific loan officer who
has demonstrated a track record of service and reliability -- or a
loan officer who works for a lender affiliated with their real estate
office.
It is often more important to choose a good loan officer, not the
institution. Loan officers have two jobs. One is to be your advocate
in getting the loan approved. The other is to deliver quality loans.
You want someone who has proven dependable and ethical in the past --
someone you can trust.
As for lending institutions, each type of lender has strengths and
weaknesses. Quality within each branch or office can vary, depending
on the loan officer, the support staff, and a variety of other
factors.
