What is the best: A Mortgage Banker, Mortgage Broker or Portfolio Lender?

January 6, 2016 5:43 pm Published by Leave your thoughts

Way back when, there were really only two places a borrower could go for a commercial mortgage—one was a Portfolio Lender (think Bank, Life, or Pension Fund) and the second was a Mortgage Broker.  Then, a third type developed which was the Mortgage Banker.  To understand each, let’s look at the differences:

Atlas acts in a Qualified Commercial Mortgage Brokerage capacity which means we source loans across the entire spectrum of lenders.  Our loans are closed with Banks, Life Companies, Pension Funds, Wall Street (CMBS), REITs, Hedge Funds, Private Lenders, SBA, Fannie, Freddie, HUD and others.

When we place a loan with a Portfolio Lender, this generally means that the lender will keep the loan and servicing on their books.  Today, Portfolio Lenders represent a much smaller portion of the annual volume of all mortgages closed.  This lender group tends to be more conservative but can have major advantages.

There are many variations of Mortgage Bankers in the market today.  It is important to know that even a major bank may only be acting in this role when quoting you a loan.  In essence, the lender may or may not retain the loan or even a portion of it.  They may also sell the servicing of the loan.  Some are only acting as a conduit for a particular program.  The advent and growth of the mortgage banking business brought much more competitive rates and terms to the marketplace.

Keep in mind that every Portfolio Lender and Mortgage Banker have their own guidelines, preferences, risk tolerance levels and underwriting criteria.  Therefore, two lenders that are offering a somewhat identical loan program, may have different outcomes for the same asset.

Remember that a loan officer’s job is to maximize profit for their employer.  A broker’s job is to maximize results for their clients.  Unless you have the time, resources and staff to research and build relationships with all of these players and constantly monitor the markets, you will receive better results with Atlas at your side.  We know which lender and program will provide optimum results at any given moment.

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This post was written by Kevin Meehan

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