Portfolio Lender


DEFINITION of 'Portfolio Lender'

A company that not only originates mortgage loans, but also holds a portfolio of their loans instead of selling them off in the secondary market. A portfolio lender makes money off the fees for originating the mortgages and also seeks to make profits off the spread (difference) between interest-earning assets and the interest paid on deposits in their mortgage portfolio.

BREAKING DOWN 'Portfolio Lender'

Many mortgage lenders avoid the risks of holding mortgages, only profiting from origination fees and then quickly selling off the mortgages to other financial institutions. There are pros and cons to both methods. Companies who profit off mortgage origination experience less risk and likely a more stable profit stream, while portfolio lenders have a chance to experience more upside on their portfolio, but also more risk.

  1. Cost Of Capital

    The required return necessary to make a capital budgeting project, ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  4. Spread

    1. The difference between the bid and the ask price of a security ...
  5. Temporary Lender

    A mortgage lender that sells the loans it originates into the ...
  6. Origination Fee

    An up-front fee charged by a lender for processing a new loan ...
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  1. If my mortgage lender goes bankrupt, do I still have to pay my mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Sorry to disappoint, but there ... Read Full Answer >>
  2. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>
  3. Are FHA loans assumable?

    Loans insured by the Federal Housing Administration (FHA) on or after Dec. 15, 1989, are assumable by qualifying borrowers. ... Read Full Answer >>
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    Online mortgage calculators are accurate to the extent that the calculator itself is asking for the right pieces of information ... Read Full Answer >>
  5. Are mortgage rates negotiable?

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