When clients contact me for the first time, I am often asked what, exactly, I do. People understand what a bank is, and they understand, to some extent, what a mortgage broker is. But a Mortgage Banker is a strange term that isn’t in the standard lexicon of most people. So when I’m asked, I generally just say I take the best of what banks offer, the best of what mortgage brokers offer, and put it all together.

But to explain further, let me start by explaining what a mortgage banker is not. I am not a traditional bank or traditional bank loan officer. Banks generally have very stringent lending guidelines, very limited lending options, national underwriters with convoluted standards, and long processing times. The rates can be competitive or very uncompetitive based upon the institution. Banks also offer a host of financial products and services, making them the jacks of all trades, but probably not the best place to get a mortgage at a good price with lenient underwriting.

Mortgage brokers, meanwhile, are individuals who prequalify your then shop your data to multiple lenders (banks) to find the best rate available. They act as the middleman between you and the ultimate lender. But they do not process the loan in-house, they do not service the loan or the loan process, and they are limited based upon the partnerships they have with lenders. And because they are providing their services, you will generally pay additional fees to them over and above the standard closing costs to the lender.

I, and other mortgage bankers, act in a space between these other options. I have the ability to work with several different lenders, including some larger banks and some smaller banks, Fannie Mae, Freddie Mac, and so on. I process the mortgage, soup-to-nuts, in-house, and then we sell the mortgage to another institution. What this means for you is a deal won’t fall apart in the eleventh hour because I didn’t know the underwriters at the bank were going to want something strange; I work directly with my underwriter and do some of the underwriting myself. We also work specifically in the greater Detroit area, meaning we don’t have to worry about what the laws are in another state, so we know our laws inside and out.

I can find the most competitive rates available and can work in any space of the industry. Technically, we can keep your loan, as we are a “bank,” however we find a national servicer who can help you with your long-term servicing needs better than we can. We are, in effect, mortgage originators who specialize solely in getting the best rates for our clients, regardless of their needs.

And this is why, after over a decade in the industry, I work for a mortgage bank. I have the convenience of underwriting at a traditional bank, without the long processing times, while having the rate shopping ability of mortgage brokers. And we have none of the extra fees, since we process the loans ourselves.

If you have any questions about the difference between mortgage bankers, mortgage brokers, and traditional banks, or if you would like to get prequalified for a mortgage, please contact me. If you have anything to add about the difference between these lending options, please leave a comment.