A mortgage company is a company that develops and/or finances mortgages for residential and commercial properties. A mortgage bank is often just the originator of a loan; it markets itself to potential borrowers and seeks financing from one of several customer financial institutions that provide the capital for the mortgage itself.
This is why many mortgage banks went bankrupt during the subprime mortgage crisis of 2007 to 2008. Since they didn’t finance most of the loans, they had little equity, and when the real estate markets dried up, their cash flows quickly disappeared.
Some mortgage lenders offer turnkey mortgage loans, including origination, funding and servicing mortgages. Factors that distinguish one mortgage company from another include relationships with funding banks, products offered, and internal underwriting standards.
The Equal Credit Opportunity Act prohibits discrimination based on age, race, color, religion, national origin, sex, marital status, or because you receive public assistance. It’s also illegal for lenders to discourage you from applying or impose other conditions based on these factors. Finally, it prohibits lenders from denying mortgages to retirees if all the standard criteria are met – things like your credit score, the size of your down payment, your liquid assets and your debt-to-income ratio.
Although it is unclear how long the trend will continue, positive economic data suggest that homebuyers can continue to benefit from low mortgage rates in the near future.
The Big Three
Here are three of the major national players on the mortgage scene.
Wells Fargo & Company
Wells Fargo, headquartered in San Francisco (NYSE: WFC WFCWells Fargo & Co.55. 05-2. 01% Created with Highstock 4. 2. 6 ) an internationally recognized name in the mortgage industry and the largest overall: in the fourth quarter of 2015, it originated 47 billion. U.S. dollars in home loans, which represented 12.7% of all mortgages. It offers the usual menu of mortgage products-fixed-rate, adjustable-rate, FHA, VA, military, jumbo, refinance, and home equity lines of credit (HELOCs)-as well as nonconforming loans with special features for buyers of high-value properties. For example, WFC’s jumbo loans offer flexible buydown options that allow customers to make lower payments in the early years of a mortgage. Other products allow customers to combine their mortgages with home loans. The online platform has recently been updated to improve processing capabilities. You can now track and trace your loan applications online from your computer, smartphone or tablet. The company’s website contains a considerable amount of educational material to help you learn more about your mortgage options. In addition, you can compare rates and loan options and calculate your payments.Although much of the application is done online, they offer a home mortgage consultant to help you through the process.