Mortgage Banker

AAA

DEFINITION of 'Mortgage Banker'

A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. After a mortgage is originated, a mortgage banker might retain the mortgage in portfolio, or they might sell the mortgage to an investor. Additionally, after a mortgage is originated, a mortgage banker might service the mortgage, or they might sell the servicing rights to another financial institution. A mortgage banker's primary business is to earn the fees associated with loan origination. Most mortgage bankers do not retain the mortgage in portfolio.

INVESTOPEDIA EXPLAINS 'Mortgage Banker'

Larger mortgage bankers service mortgages, while smaller mortgage bankers tend to sell the servicing rights

The distinguishing feature between a mortgage banker and a mortgage broker is that mortgage bankers close mortgages in their own names, using their own funds, while mortgage brokers facilitate originations for other financial institutions. Mortgage brokers do not close mortgages in their own names.

RELATED TERMS
  1. NAHB/Wells Fargo Housing Market ...

    An index based on a monthly survey of members belonging to the ...
  2. House Poor

    A situation that describes a person who spends a large proportion ...
  3. Mortgage Broker

    An intermediary who brings mortgage borrowers and mortgage lenders ...
  4. Assumable Mortgage

    A type of financing arrangement in which the outstanding mortgage ...
  5. Mortgage Servicing Rights - MSR

    A contractual agreement where the right, or rights, to service ...
  6. Mortgage Bankers Association - ...

    The national association that represents the real estate finance ...
Related Articles
  1. The Beginner's Guide To Homeowners' ...
    Home & Auto

    The Beginner's Guide To Homeowners' ...

  2. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  3. Understanding The Mortgage Payment Structure
    Credit & Loans

    Understanding The Mortgage Payment Structure

  4. The Reverse Mortgage: A Retirement Tool
    Options & Futures

    The Reverse Mortgage: A Retirement Tool

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center