Mortgage Terms

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Originator The company that takes your loan application and works with you to close the deal. This company could be a retail lender or a mortgage broker. Retail Lender A retail lender has loan officers who take your application, processors who process the application, and underwriters who approve or decline your loan. A retail lender could be a bank, savings and loan, or a mortgage banker. Mortgage Broker A mortgage broker typically processes your application and sends it to one or more wholesale lenders for final approval.

Wholesale lenders have underwriters who approve/decline your loan. A mortgage broker has access to a variety of wholesale lenders and often offers the most choice in loan programs.

Wholesale Lender

A wholesale lender only works with mortgage brokers. They take completed loan packages and underwrite them. They offer mortgage brokers discounted pricing in return for the upfront work done by the mortgage broker. Some companies may have both a retail and a wholesale division.

Investor

Lenders may keep your loan in their portfolio or they may sell your loan after the close of the transaction to an investor. If lenders portfolio the loan, they only have to follow internal guidelines to approve your loan, and so are the final decision-makers. If lenders sell your loan, then they also have to the meet the investors guidelines to approve your loan. In this case they may have to obtain investor approval. Portfolio lenders tend to be more flexible but they generally have higher rates. Some of the largest investors in the country are Fannie Mae and Freddie Mac.

Servicer

The servicer of your loan collects monthly payments from you. When a lender sells your loan to an investor they may or may not sell the servicing on the loan. Therefore if you obtain a mortgage from a lender, and if that lender sells the loan to Fannie Mae, the lender may retain the right to service your loan and collect your monthly payments. The sale of the loan does not affect you in any way. The lender could also choose to sell the servicing on your loan, in which case you would have to make payments to a different servicer.