As you consider your mortgage options in today’s lending world, there are basically three different kinds of folks you can work with as you explore mortgage options: Mortgage Broker, Mortgage Banker and a Retail Loan Officer. Regardless of which path you choose, all of the products offered through all three are created and underwritten to the guidelines of Fannie Mae or Freddie Mac.
A few years back, I was a Mortgage Broker where I operated independently of a bank and could shop various options to help find my clients the best loan scenario for their particular needs. As the mortgage industry changed, and the crisis occurred, it become increasingly difficult to operate as an independent broker given the increased scrutiny on this sector. As a small business owner, the increased legal/compliance requirements meant I spent less time serving my clients and more time trying to remain compliant in the new mortgage world. From a P&L perspective, it became too expensive to operate under this structure.
I was blessed to find my way to a Mortgage Banker role, which provided the infrastructure I needed (e.g., compliance management, operations support) but expected me to bring in my own business. In this scenario, I became a bank employee and part of a broader team seeking a win/win for both the clients and the bank. We all want the process to work as well as possible and now I find that I can close loans within three weeks even in today’s tougher mortgage environment. As an additional upside, First United Bank, does not sell off the loans it originates and services them internally. So, if there is a problem afterwards, I can actually call someone internally versus not being able to correct an issue when a loan is sold off.
Finally, there are big Retail Lenders with Retail Loan Officers who sit at a corporate location and field inbound activity from things like marketing campaigns or branch referrals. Typically this type of business is focused on bank brand, and less on relationship, given that you never know who you will get and his/her qualifications. Many of these large retailers are not known for being the most nimble in terms of working volume through their processes which can sometimes create issues if you are time sensitive. If you are interested in the industry, this can be a great way to start out learning the business.
When it comes to one of the largest purchases of your life, you deserve the best loan possible: a loan to match your personal needs and be priced correctly. While there are lots of choices in the market, I would encourage you to consider where you think you will get the best advice around the most effective options for you and your family. Find someone you trust, and go that route, regardless of which of the three options you might land. If there’s trust, when the inevitable hiccups happen, you will have an advisor who has your needs at heart.