Mortgage Bankers and Mortgage Brokers provide a similar service, yet there is a significant difference between the two; differences that can ultimately impact the mortgage loan process. These differences can range from creating inconvenience to changing the structure of the loan and in even cause a loan to be denied. Here are just a few of the differences:
Mortgage Bankers under the new HVCC appraisal law can order the appraisal from a vendor of their choice. This appraisal can then be used with any of the Mortgage Banker’s investors. A Mortgage Broker must order the appraisal from a predetermined investor’s chosen automated valuation company and no employee of the mortgage broker can speak with the appraiser. Should the Mortgage Broker choose to send the loan to an alternate investor for any reason, the appraisal must be transferred to the alternate investor. This process is time consuming and cumbersome and adds additional borrower expense.
Due to this HVCC appraisal law, Mortgage Brokers must choose the investor at the time the appraisal is ordered. Since the Mortgage Banker can use the appraisal with any of its investors, it can take advantage of choosing the investor offering the best interest rate at a much later point in the transaction. Mortgage Bankers deliver a closed loan which greatly reduces the work flow of the investor resulting in a better interest rate for the borrower!
At approval, the Mortgage Banker prepares loan documents and ultimately funds the loan using its warehouse line. The Mortgage Broker is dependent on the investor to prepare the loan documents and fund the loan. The Mortgage Banker is the lender at close of escrow and has complete control of the transaction.
In summary, Mortgage Bankers like CFS Mortgage Corporation provide the opportunity for borrower’s to take advantage of multiple investors just like a Mortgage Broker but through a much simpler and cost effective approach. Call your CFS Mortgage Corporation loan officer to discuss in greater detail!
