When you shop for a mortgage these days there are several different ways that you can go about it. These different channels, as they are called, offer the mortgage consumer a host of options.
Brokers work with you – the borrower – to determine your needs. Then they go out and shop your loan to several lenders to find which one
will offer you the most favorable terms. The processing of your file will be done locally, but most likely the underwriting and other functions will be done offsite. At closing, the lender will wire money to the title company.
Bankers are a bit different than brokers in that the entire process, from application to closing, is handled internally. The mortgage bank will use its own funds to complete the transaction at the closing table. Loans obtained through a mortgage banker eventually will be sold to end investors, who supply the guidelines under which these mortgages are underwritten. Bankers work with multiple lenders/investors to give potential borrowers a wide range of options when they finance their homes.
This group is largely made up of the big box banks – large retailers, who can now provide lending services to customers. Retail lenders process and underwrite the mortgages, though probably in a different location, and fund their own loans. Eventually, the mortgages are sold to investors. Big box banks offer a wide variety of programs and competitive rates, but may have fewer options available than brokers or bankers.