So you need a mortgage loan.  Who do you use, a bank, a broker, or a direct mortgage lender?  All will get you a loan, and all have 'Loan Officers'. 

Let's explore the differences:

When you're looking to get a mortgage loan, you will of course deal with a Loan officer, but where they work, and their background can make a huge difference. People often confuse the different lender types, because they will all glean the same results: a new home, or a lower rate on your refinance. However, it is important to understand the difference between the three types of lenders so you know what to expect from them during the mortgage application process. 

Consider the fact that Fannie Mae, Freddie Mac, and banks make the rules, and the banks review, underwrite, and fund the loans for brokers. So who is fooling who? Fat cat banking industry lobbyist are spending your tax dollar with their bail-out money to portrays themselves as innocent victims, and have done a wonderful job getting that incorrect message sent to Washington.

Effective January 1, 2011 all Mortgage Bankers and Mortgage Brokers across the county were required to meet new strict standard, and to be licensed according to the S.A.F.E. Act., that is UNLESS they work at one of the big banks!

An exemption in the consumer protection laws allows Loan Officers at the big Interstate Chartered Banks to NOT have to follow the same rules! Who are these banks? All the big names (Wells Fargo, US Bank, Chase, Bank of America, etc.), plus plenty of smaller ones.

Now I am not trying to make this into a David versus Goliath story, but I am trying to emphasize the huge differences and implications this change will have on the consumer. As the new requirements have been rolling out across the country, many of the current Loan Officers who have been unable to meet the new requirements, and especially those who have failed the new tests, have simply gone to the large banks to work.

Call us now to find out the advantage correspondent DIRECT lending can mean for you on your home loan for properties in Minneapolis, St Paul, Duluth, Rochester, Madison, Milwaukee, all of Minnesota, Wisconsin, and South Dakota!

Question:
What is a correspondent direct lender, and why is it so important to us?
Answer:
Simply put, you want only the cream of the crop, no matter what you are doing. A correspondent direct lender is just that. The term says their mortgage company originates, processes, underwrites, issues loan commitments, closes, and funds their own loans

Question:
What is the difference from a plain mortgage broker?
Answer:
Mortgage brokers can NOT issue a loan commitment, or a real Pre-Approval letter. If you are working with a broker, and they have given you a pre-approval letter, it is a worthless piece of paper, and in violation of law unless a real lender they submitted your loan to has actually approved you.
They originate, and process your loan (help you get the paperwork together and verifies the information for the real lender), but they do not underwrite, close, or use their own money. The borrower often doesn't deal with the real lender, or even know who the real lender is until closing. The process works, with one exception - you may not get the best deal. The higher rate you pay, the more the broker earns. You might also be very surprised to find out that many so called "top lenders" are really just small brokers with 10 employees or less! Is this who you want to deal with?

Question:
Why are there so few correspondent direct lenders?
Answer:
Mainly because it is easy to become a mortgage broker, while it is hard to be a direct lender. There are two primary criteria few brokers can meet. The first is a seven-figure net worth requirement. The second is an initial audit process that scrutinizes past transactions. You're ineligible if predatory lending practices are found, or questionable transactions are uncovered. Our correspondent direct lender status is hard earned and we believe it affords our loyal following of customers many benefits. Unfortunately, it is extremely easy to become a simple mortgage broker.

Question:
What are some of the other benefits?
Answer:
First, our clients prefer the process to be completely self contained, providing them with superior privacy, security, and pricing.

1. Correspondents typically get better pricing from funding sources, with fewer loan program restrictions.

2. Many of the highest producing real estate agents refer their clients to correspondent lenders only. It makes their buyer's offers more credible to sellers, and provides all parties involved in the transaction more confidence that those lenders will get the loans closed on time, every time, or they wouldn't have been approved as correspondents in the first place.

3. The vast majority of conforming fixed mortgages are sold by correspondent lenders to large servicers. Because of the high credit quality of these entities, the original mortgage loans can be offered at lower rates.

Banking Institutions, Credit Unions, mortgage brokers, and many traditional mortgage companies are limited by the number of mortgage programs they can offer. These lenders typically represent one, or just a small handful of investors.

Correspondent direct lending allows you to find the right mortgage program for your needs from hundreds of financing options. Our expertise in understanding home-lending options ensures that the qualifying and approval process goes quickly and smoothly.