Mortgage Terms
Originator
The company that takes your loan application and works with you to close the deal. This company could be a retail lender or a mortgage broker.
Retail Lender
A retail lender has loan officers who take your application, processors who process the application, and underwriters who approve or decline your loan. A retail lender could be a bank, savings and loan, or a mortgage banker.
Mortgage Broker
A mortgage broker typically processes your application and sends it to one or more wholesale lenders for final approval.
Wholesale lenders have underwriters who approve/decline your loan. A mortgage broker has access to a variety of wholesale lenders and often offers the most choice in loan programs.
Wholesale Lender
A wholesale lender only works with mortgage brokers. They take completed loan packages and underwrite them. They offer mortgage brokers discounted pricing in return for the up front work done by the mortgage broker. Some companies may have both a retail and a wholesale division.
Investor
Lenders may keep your loan in their portfolio or they may sell your loan after the close of the transaction to an investor. If lenders portfolio the loan, they only have to follow internal guidelines to approve your loan, and so are the final decision-makers. If lenders sell your loan, then they also have to the meet the investors guidelines to approve your loan. In this case they may have to obtain investor approval. Portfolio lenders tend to be more flexible but they generally have higher rates.
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