mortgage bank

In the US a mortgage bank is a state-licensed banking entity that makes mortgage loans directly to  The difference between a mortgage banker and a  is that the mortgage banker funds loans with its own Generally, a mortgage bank originates a loan and places it on a pre-established  until the loan can be sold to an investor, such as  The process of selling a loan from the mortgage bank to another investor is referred to as selling the loan on the Mortgage banks frequently use the  to sell loans because the funds received pay down their warehouse lines of credit which enables the mortgage bank to continue to lend. A mortgage bank is not regulated as a federal or state bank and does not take deposits from consumers or businesses. A mortgage bank raises some equity which it uses to guarantee the warehouse line and the bulk of the funds are provided by the warehouse lender.A mortgage bank can vary in size. Some mortgage banking companies are nationwide. Some may originate a large loan volume, exceeding that of a nationwide . Many mortgage banks employ specialty servicers for tasks such as repurchase and fraud discovery work.Their two primary sources of revenue are from loan  and  fees (provided they are a loan servicer). Many mortgage bankers are opting not to service the loans they originate. By selling them shortly after they are closed and funded, they are eligible for earning a service released premium. Theinvestor that buys the loan will earn revenue for the servicing of the loan for each month the loan is kept by the .

Unlike a federally chartered  a mortgage bank generally specializes only in making mortgage loans. They do not take deposits from customers. Their funds come primarily from the secondary wholesale market. Examples of the secondary market lenders most known are Fannie Mae, and Freddie Mac.A company desiring to enter the mortgage business often chooses to be a mortgage banker vs. a mortgage broker primarily to earn . Mortgage bankers risk their own capital to fund loans and therefore do not have to disclose the price at which they sell mortgage to another company. Mortgage brokers, on the other hand, earning the same yield spread premium disclose the additional fee to the consumer because the yield spread premium becomes an additional fee earned and therefore discloseable under federal and state law.A mortgage bank generally operates under the different banking laws applicable to each state they do business in.

Mortgage bankers can be very competitive in mortgage lending as they specialize in only lending, and do not have to factor in subsidizing any losses in other departments, such as traditional banking. At the same time they often do not have the same access to low cost adjustable rate mortgages which are typically associated with federal banks and access to federal money.A mortgage broker works as a conduit between the buyer and the lender, the loan officer typically works directly for the lender. Most states require the mortgage broker to be licensed. States regulate lending practice and licensing, but the rules vary. Most have a license for those who wish to be a "Broker Associate", a "Brokerage Business", and a "Direct Lender".A mortgage broker is normally registered with the state, and personally liable (punishable by revocation or prison) for fraud for the life of a loan. A loan officer works under the umbrella license of their current institution, typically a bank or direct lender. Both positions have legal, moral, and professional responsibilities as well as liabilities to prevent fraud and fully disclose loan terms to both consumer and lender. Additionally, agents of mortgage brokers may refer to themselves as "loan officers".Mortgage brokers must also be licensed through the Nationwide Mortgage Licensing System and Registry (NMLS). The purpose of the Nationwide Mortgage Licensing System is to improve and enhance mortgage industry supervision, create better communication from state to state, and to create consistency in licensing requirements and automate the licensing process to the greatest degree possible. Loan officers that work for a depository institution are required to be registered with the NMLS, but not licensed.Typically, a mortgage broker will make more money per loan than a loan officer, but a loan officer can utilize the referral network available from the lending institution to sell more loans. There are mortgage brokers and loan officers at all levels of experience.