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Unformatted text preview: – The mortgage banker acts as a liaison or middleman between the borrower and the lender. when a borrower seeks a loan from a mortgage banker the usual procedures are: • • • The customer fills out a loan application, assisted by a loan officer; A credit report is ordered; A company appraiser evaluates the property (at this stage the investor, usually an Institutional buyer, has been determined, and the appraiser is guided by standards important to the investor, e.g., new homes only); The application package, including application form, borrower's financial statement, appraisal, photographs of the property, and a copy of the sale agreement or building contract is mailed to the investor; The investor decides whether to accept; Approval is sent to the mortgage company; When specific loan conditions are met, the mortgage banker forwards funds to escrow for closing; and, After closing, the key documents are sold to the investor, and the mortgage banker is ready to commence servicing the loan. • • • • • Advantages/Disadvantages – The mortgage loan broker can offer to the prospective borrower a much more extensive menu of loans of many types from many lenders. The borrower can effectively “shop” more extensively for the most advantageous loan and most suitable loan from the borrower's point of view. However, a loan broker must be paid a brokerage fee for the services rendered. This fee is negotiable, and may be paid by the lender from the loan origination fee or discount points. PORTFOLIO LENDERS
Lenders who make some loans which they do not intend to sell in the secondary mortgage money market are referred to as “portfolio lenders.” These loans do not have to meet FNMA/FHLMC guidelines. For these loans, a lender may accept credit problems and may make higher risk loans at higher interest rates.
Dynasty School (www.dynastySchool.com) 15-17 REAL ESTATE FINANCE WHAT KIND OF LOAN?
Total price of a property seems to be of much less consequence to buyers than purchase terms. They shop terms. If the down-payment and monthly payments are low enough to meet their “pocketbook,” price appears to be of secondary importance. The same is true in shoppi...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10