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Key Lender Roles in Mortgage Loan

If you are in the market for a mortgage loan, it would be best to familiarize yourself with the various lender roles that you may encounter along the way. Below are the more common lender roles.

Mortgage brokers act as intermediaries between lenders and borrowers. They typically work with many lenders so they can help the borrower save time in securing loan options and in negotiating. Mortgage brokers are responsible for most of the loans issued by lenders utilizing this distribution channel.

The functions of a mortgage broker are many and at times, they may overlap the duties performed by a lender’s loan officer. Aside from marketing a loan to a client, the broker usually also performs an initial assessment of the borrower. This helps the broker find a lending institution and a loan product that would be the best fit for the client’s needs. The mortgage broker may also help the borrower secure the needed documents, fill up the application form, answer questions the borrower may have, and submit the documents to the chosen lenders. A mortgage broker may be compensated by the borrower. He may also be paid by the lender. In this case, the fee is sometimes factored into the interest rate of the borrower, into the loan amount, or into the processing cost.

Aside from brokers, there are also mortgage agents that can help borrowers in securing a loan. Mortgage agents typically, though not necessarily, represent only one financing source. They advise clients based on financing solutions offered by their company. They are on the front line, answer the questions the client may have, and may also help borrowers in securing the needed documents and in filling out the required forms.

When the borrower has already finished evaluating his options, he now deals with the mortgage lender. The mortgage lender is the individual or the company who funds the loan. After the borrower completes all the requirements and submits these to the mortgage lender, these are passed on to the underwriter for evaluation. Underwriters review an applicant’s case to determine whether or not to grant the mortgage. They can approve or decline a loan application. As part of the review process, underwriters may ask for additional documents or supplementary information.

It is the underwriter’s job to make sure that the lender will not be subject to financial risk and eventually financial loss because of the loan. Thus, they assess each applicant’s credit worthiness as well as the value of the collateral. These days, many companies employ computer models to help underwriters. These computer models can speed up the loan process by screening applications in volumes, thereby lessening the applications that the underwriters would need to examine.



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