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Mortgage Banker vs. Mortgage Broker

Both Mortgage Bankers and Mortgage Brokers are known as Mortgage Loan Originators (MLO’s) or Loan Officers (LO’s).

At California Mortgage Advisors, Inc., we are a mortgage banker dedicated to providing our clients with industry leading service. Our Mortgage Advisors are available at (800) 927-6560 to answer your questions regarding any step of the loan process or click here to apply online.

Unfortunately, the world of home mortgages is a complicated place. One of the biggest problems is that many places use certain terms interchangeably, regardless of their legal definition or industry accepted standards. This means it is difficult to understand the difference between a mortgage banker, a mortgage broker, and a loan officer.

Mortgage Banker
– Mortgage Banks are usually local brick and mortar lending institutions. Mortgage Bankers process, underwrite, approve and fund loans with their own funds. Some loans are held for servicing while others are sold to large investors or large banks.

Mortgage Broker – Mortgage Brokers can be thought of as consultants. They are not affiliated with any one bank in particular. Instead, they act as an intermediary between borrowers and potential lenders.

Loan Officer – A loan officer can work for a mortgage bank, retail bank or mortgage broker. They assist borrowers in filling out paperwork and offer loan related advice.

While Mortgage Bankers and Mortgage Brokers work to provide their clients with a loan, a Mortgage Banker can provide several unique benefits.

Reliability

Most mortgage banks are fixed parts of their community with deep, established roots and reputations built over thousands of loan transactions. They also have unparalleled access to the resources to meet the needs of a diverse clientele base. This means borrowers typically know exactly what to expect when dealing with a particular mortgage bank.

On the other hand, mortgage brokers are intermediaries who gather information and supporting documents from the borrowers then match their borrowers with the most fitting wholesale lenders to fund the loans. Mortgage Brokers do not underwrite loans nor do they draw loan documents or fund loans directly, therefore, losing some efficiency and control along the way.

Simplicity

When dealing with a mortgage banker, borrowers are dealing directly with the source of their loan. Applications, verification documents, and other relevant paperwork go directly to one source and is stored in a centralized location. Any decisions about the loan or questions regarding the terms of the loan can, therefore, be addressed and resolved quickly and efficiently. At CMA, our Mortgage Advisors are authorized to make real-time decisions when negotiating loan terms. They also have extensive experience with the loans that we offer, making them excellent sources of information and advice.

Mortgage brokers are merely intermediaries between borrowers and lenders. This makes it difficult for them to answer questions in a timely fashion or negotiate loan terms because they have to relay pertinent information between multiple sources. It also means that documentation often has to be provided to multiple institutions as the mortgage broker shops around for a lender that best meets the borrower’s needs.

Speed

Obtaining a loan from a mortgage bank is flat-out faster than any other method. Obtaining even the simplest loan is a complicated process. Documentation, negotiation, and unique circumstances are all factors that can delay a mortgage. At CMA, every step of the process is handled in-house. Our employees also have the autonomy to use their personal discretion when dealing with unique or unusual situations. From the second that a borrower contacts one of our Mortgage Advisors, we are focused on approving their loan as soon as possible.

Mortgage brokers do not have the luxury of operating in a streamlined system. Mortgage brokers simply do not have the direct access infrastructure to underwrite and fund loans directly. Every piece of paperwork or documentation has to be mailed, e-mailed, uploaded, faxed, or hand delivered, often to multiple sources. This just causes inefficiencies.

At CMA, our Mortgage Advisors work tirelessly with borrowers to provide the most competitive loan terms and rates in the business. Our Mortgage Advisors are available at (800) 927-6560 to answer your questions or click here to apply online.

We look forward to providing you with the advice, service, and expertise that you deserve.