Mortgage Broker to Mortgage Banker (MBS) - Broker to Banker information
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Mortgage Broker to Mortgage Banker

It used to be that when you applied for a mortgage, it was assumed you would go to the local bank where you keep your savings and checking accounts. Today, there is a wide range of choices. You also can apply with a mortgage broker, credit union, (mortgage broker to mortgage banker) professional or trade associations that you belong to, the financial services firm that manages your mutual fund investment account, state and regional housing agencies, a private home financing company or even the seller.

There's a lot of money to be made by the companies that provide or find mortgages for home buyers, not only on the interest, but also on closing costs and other fees.

With so many possibilities, where do you start? Basically, you can approach a mortgage banker or lender directly, or you can go to a broker to banker.

Mortgage Banker
The mortgage banker is the lender; the one making the loan directly. As Steve O'Connor of the Mortgage Bankers Association of America puts it: Why not go directly to the source?

Even if you use a broker as the middleman, it's the lender who makes the ultimate credit decision, said O'Connor, the association's senior director of residential finance. "And it can be cheaper, and perhaps faster, if you go to the source of the goods," he said.

A mortgage broker to mortgage banker will present you with only that lender's program of mortgages, so you need to speak with several lenders to do comparative shopping. You can look at the real estate section of your local newspaper to get an overview of lenders in your area and their rates.

Mortgage Broker
A mortgage broker serves as a matchmaker between the home buyer and the lender. The broker draws from a pool of lenders to find the right match.

"The whole thing about a broker is choice," explains Neill Fendly, a Phoenix, Ariz., broker who is vice president of the National Association of Mortgage Brokers. "The broker has access to the products of hundreds of lenders, not just one lender's programs."

In scanning the mortgage broker to mortgage banker market, both nationally and regionally, Fendly says, a broker knows a lender's specialty. The broker can identify what lender might fit a borrower's special needs, such as the first-time home buyer.

The broker does everything the lender would do -- checks your credit and work record, arranges for title search and hires the property appraiser -- but, once all of this information is compiled, the broker selects a mortgage lender that will most likely accept your application based on your financial data and personal information. In some offices, the mortgage brokers also are lenders.

While you may rely on the expertise of the mortgage broker to mortgage banker, it is wise to make sure you are given options. Have the broker present several programs that meet your needs from different lenders.

How to Check on Reputation
As money-lending institutions, all mortgage bankers are subject to regulation. You can check on how the industry is regulated in your state by contacting either the state's department of banking or division of real estate. You can check there for any licensing requirements, and check if the particular lender is in good professional standing. The Library of Congress has an index of state and local government web sites.

Not all states require mortgage brokers to be licensed, so you will have to check with your state government. The local Better Business Bureau is another place to check whether there have been any complaints about the mortgage banker or broker. Get mortgage licenses - Mortgage Broker License Requirements and learn what it takes to become a mortgage broker in all 50 states including mortgage license requirements and websites to visit for more information. Mortgage Broker License and what is required to get mortgage licenses. Mortgage License Mall mortgage license, mortgage lender banker, home equity loans, home improvement loans, purchase money mortgages, and mortgage refinance.

Then, there are the professional organizations. "You can call your local Association of Mortgage Brokers and find out if the broker is a member," says Fendly. Do you need help with correspondent lenders? The association is a nonprofit organization with a code of ethics and business practices that applies to any broker who wants to be a member. There is a section of the association's web site where you can search for a member broker in your area.

Whether you choose a mortgage broker to mortgage banker, it's a good idea to ask friends and relatives, especially those who have recently gone through the process, to recommend a mortgage professional. When you meet with the broker to banker lenders, you should explain your desires and concerns about becoming a homeowner, and then listen to how eager they are to work with you. After all, no mortgage lender makes money by turning you down.

Still looking for more information on making the switch from mortgage broker to mortgage banker, well then view some of our resources:

Mortgage Broker to Mortgage Banker resource # 1

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