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There are various classifications of lenders — brokers , correspondent lenders, and mortgage lender-servicers which includes retail and commercial banks, credit unions, or thrift institutions.

Brokers may include table funded lenders who do not actually underwrite the loan directly. They act as agents or have lines of credit with the lenders. Correspondent lenders sell their loans to servicers, national examples include Quicken Loans and Lending Tree.  Lender-servicers underwrite and keep the loans on there books, while collecting ongoing loan payments.  This includes such lenders as Countrywide, Wells Fargo, or Bank of America.

Home-Account’s lenders currently are considered Super regional correspondent lenders.  They operate as direct lenders without working through a broker, either servicing the loans themselves or re-selling the loan to a larger servicer.  Home-Account will be dealing with the banker who is funding the mortgage and at the same time either able to service the loan or sell the mortgage to a larger servicer resulting in lower interest rates (i.e. better value) for our members. 

These specialized lenders are able to handle numerous applications and mortgages, on average able to close over 2,000 mortgage per month.  Over a billion dollars of mortgage loans were funded in 2008 by just our initial five lenders.

Here are some additional links you might find interesting:

htttp://www.sideroad.com/Mortgage/home-financing-correspondent-lender.html

http://mortgage-x.com/library/lender_types.htm

http://www.bankaholic.com/finance/what-are-correspondent-lenders/

http://www.mtgprofessor.com/A%20-%20Type%20of%20Loan%20Provider/what_is_a_correspondent_lender.htm

Jack Library Broker, Correspondent, lenders, mortgage

The U.S. Department of Housing and Urban Development recently announced stricter rules for mortgages it will accept under its FHA insurance program. the new rules, which are mainly intended to discourage mortgage fraud, are being interpreted in interesting — and remarkably uniform — ways by lenders.

The new rules increase Mortgage Premium Insurance fees, impose a maximum Loan-to-Value of 85 percent for cash-out loans (95 percent for non-cash-out), require that cash-out loan applicants actually live in the house and have owned it for at least 12 months. For loans over $417,000, FHA is requiring two appraisals.

The new rules aren’t official until April first but they are being embraced — and in some cases implemented — early by many lenders.

One area where lender implementation varies from the text of the FHA guidelines is for qualifying credit scores. Traditionally credit scores have not been a major factor in underwriting FHA loans, making them in many cases the last bastion of sub-prime lending. But with this rule change most lenders are imposing a minimum 620 score even though that is not in the new FHA rules.

The lenders are also finding creative ways to use the double appraisals on higher value properties. The FHA rules simply require that two appraisals be ordered, not which of the two appraisals to use. The FHA logic is that multiple appraisals will discourage the use of artificially high appraisals that could facilitate mortgage fraud. Which appraisal to use for underwriting is left to the lender.

According to experienced mortgage brokers, this is leading to interesting applications in the secondary mortgage market. Specifically the lender will use the lower appraisal to determine how much money can be lent on the property. If the lower appraisal says the property is worth, say, $100,000, then the maximum loan amount would be $85,000 or 85 percent with cash-out. But by applying the higher appraisal — say $103,000 — to characterizing the loan for resale, the same mortgage looks to have a loan-to-value of $85,000/$103,000 or 82.5 percent. The lower the loan-to-value the higher the secondary resale value of the mortgage, so this technique converts into greater revenue for the lender.

Its the mortgage lender version of the game Three Card Monty.

cringely Lender Updates, News FHA, LenderME, lenders, pnews