A mortgage company, also referred to as an origination mortgage company or mortgage broker, is a company engaged in the commercial activity of funding and originating loans for residential or commercial real estate. In order to qualify for a mortgage loan, a mortgage company must be licensed with the secretaries of states of the various states in which the loan is to be made. Generally, a mortgage company bears the title of the borrower and assumes the liability for all acts performed by the borrower while the mortgage is enforced. Generally a mortgage company is involved in the commercial part of the home-buying process through the underwriter or lender. However, it may also act as an intermediary and negotiate loan offers from a variety of sources.
The majority of home mortgage loans are provided by banks. Most of these banks engage in direct sales of home mortgage loans. In addition, a large number of mortgage companies, including thrift institutions, credit unions, and various investment banks, participate in the direct sale of mortgage loans through brokers and salesmen. In addition, many banks also originate the loan paperwork directly from applicants, rather than through third parties such as mortgage bankers and loan officers. For these reasons, many mortgage loans are “direct” – that is, home mortgage loans are originated by the bank rather than through third-party intermediaries such as investment banks.
For both commercial and residential mortgage companies, a major consideration is the status and creditworthiness of the borrower. To secure loan funds from financial institutions, most mortgage companies require applicants to have a reasonable credit rating. In order to achieve good credit standing, most mortgage companies will carry interest rate insurance on the loan. Additionally, if you fail to pay your loan on time, some mortgage companies will refuse to finance you at all. However, even with poor credit, there are ways to secure home loans from financial institutions.
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