Three basic types of mortgage lenders exist: Direct Lenders, Loan Brokers, and Wholesale Lenders. Many Direct Lenders act as Hybrid Lenders, which allows them to switch from one type to another as circumstances require.
The types of lenders are different from the types of loans. Property type, loan position, income, credit, and other factors can be categorized into hundreds of loan types. Each type of lender could be engaging in arranging several types of loans.
Using Lendersa® Portal, a borrower does not have to worry
about the distinction between types of lenders because your loan request will
be reviewed by the most qualified lender regardless of their type. Wholesale
Lenders will only contact brokers submitting loans on behalf of their clients.
A Direct lender works directly with the Borrower.
There are different opinions on what constitutes a Direct Lender. At Lendersa®, we call a Direct Lender any lender who has all the three attributes below:
The Direct-Lender underwrites and delivers final approval
The Loan documents bear the name of the Direct-Lender
The Direct Lender has the money ready to fund the loan
A Mortgage loan Broker arranges loans with wholesale Lenders.
There are disadvantages to sticking with one type of lender instead of both. A Broker could be the only person who could successfully arrange the loan because the Broker will package it and find a Wholesale Lender that is not available directly to the Borrower. Find out details on Broker Vs. Direct Lenders.
The Lendersa® portal connects you with the most qualified Brokers and Direct Lenders; this way, you get the best of both worlds.
Brokers are trying to avoid a Broker Chain and control their loans better. Therefore, they are seeking funding sources and are only looking for Wholesale Lenders.
A Wholesale works
with mortgage brokers. A strictly Wholesale Lender cannot be reached directly
by a Borrower. A borrower must contact a loan Broker to receive loan approval
and funding from a Direct Lender.
A Hybrid lender can act in two or three capacities based on the loan circumstance.
For example, a Hybrid Lender can accept an application from a Mortgage Broker and also accept an application directly from a borrower.
A Hybrid lender can sometimes act as a Mortgage Broker and Sometimes as a Direct Lender. There are three types of Hybrid Lenders, a fact which does not mean much for most borrowers but is more significant to Mortgage Brokers.
A BD-type HyperLender can fund loans directly, or he can package the loan and transfer it to a Wholesale Lender. A BD Lender will not accept applications from other loan Brokers.
DW-type Hybrid Lender Does not act as a Broker. He will accept applications from Brokers or directly from Borrowers. If A DW Lender cannot fund the loan, he will not transfer the loan package to any other lender.
BDW-type can wear all three hats of any one of the Lender types. The Hybrid BDW could fund loans as direct lenders or transfer the package to other wholesale lenders. He can also
Accept loan packages from other brokers.
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