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Types of Lenders

There are different types of real estate lenders including mortgage lenders, banks, mortgage brokers, home builders, and Internet lenders.  Mortgage Brokers are companies that originate loans with the intention of brokering them to wholesale lending institutions, which looks after the underwriting and funding aspects.  Some mortgage brokers charge processing or origination fees.  Mortgage bankers are large scale lenders capable of originating loans and creating large reserves of loans.

Mortgage bankers and portfolio lenders also act as wholesale lenders and rely on mortgage brokers for loan origination.  These wholesale divisions offer loans to mortgage brokers at a lower cost than their retail branches offer them to the general public.

Direct lenders constitute yet another type of real estate lenders.  A direct lender loans the money directly to the borrower. Banks and credit unions are examples of direct lenders.  In addition, there are secondary market lenders which facilitate the nation-wide availability of loans by allowing money to move easily from state-to-state.  Federal National Mortgage Association, Government National Mortgage Association and Federal Home Loan Mortgage Corporation are secondary market lenders.

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