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Unformatted text preview: anagement of properties, and insurance and operate as real estate brokers. Many obtain their funds from commercial banks on short–term borrowing by obtaining lines of credit and by arranging for advances from banks against mortgage documents while such loans are in process of being sold to the ultimate purchaser of the paper. Regulation – These companies are subject to minimum supervision and have wide latitude of powers. The companies are usually free of lending limitations such as are placed on Institutional lenders and, except for inspections by an examiner in conformity with state laws, assume entire responsibility and make all decisions about their mortgage lending operations and their servicing of these loans. Secondary Market Activities – Some companies serve only as intermediaries and resell the loans as soon as they are made, under such programs as Federal National Mortgage Association, Government National Mortgage Association and Federal Home loan Mortgage Corporation, all secondary market facilities. Business Activities – The mortgage banker is often an “importer” of funds, acting as an intermediary between out–of–state or distant investors and local borrowers, causing funds in capital–surplus areas to be transferred to capital – deficient areas such as California. Lending Policies – The prevailing policy of these mortgage companies is to deal in mortgages which are most readily salable in the secondary market. Therefore these “temporary” lenders prefer government–insured or government–guaranteed mortgages, and conventional or uninsured mortgages for which they have advance purchase commitments. Generally mortgage bankers restrict their conventional loans to selected residential and business risks, and to loans in price ranges suitable to the needs of investment fins that comprise the secondary mortgage market.
15-16 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 15: REFINANCING OR NOT AND CHOOSING A LENDER
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- Spring '10