Significance

Mortgage companies fund a large piece of the housing industry and have come under fire as of late for unfair lending practices that have left a number of borrowers in a state of foreclosure.

Function

A borrower solicits mortgage companies to find the best rate and product to match their needs. Once the loan closes, the borrower looks to the mortgage company to handle the paperwork associated with each month's payment.

Types

Mortgage lenders can be correspondent or broker lenders who serve as the connection between the mortgage company and the borrower. Other mortgage companies originate and service their loans.

Time Frame

The length of a mortgage, from 10 to 30 years, dictates the length of the relationship between a borrower and a mortgage company. However, mortgage companies often sell the loans to other companies for quicker profit from the loans.

Misconceptions

Many borrowers think that the mortgage lender who closes their loan will be the mortgage servicing company as well. However, this is not always the case, as many lenders serve as the connection source to other lenders and many sell the loan paper upon receipt.

Source:

Nachi.org

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