Most mortgage companies today are brokerages that do not underwrite or fund the loans themselves. They help to place customers with the most competitive loans that make sense for their situation and personal finances.
Many small mortgage companies went bankrupt in the housing bubble of 2008. Mortgage companies are known as loan originators since they pair customers with loans that suit them and get the process started. Some companies also fund mortgage loans, but most are basically brokerage services that do not lend the money themselves.
Federal programs such as Fannie Mae and Freddie Mac help loans find funding and favorable interest rates, and mortgage companies help consumers navigate the large number of options on the marketplace and walk them through the process. Mortgage companies depend on customer service, referrals, and marketing to drive their production since they do not have a client base already doing business with them in some way, as banks do.
The subprime mortgage crisis in 2008 wreaked havoc on small mortgage companies, and many of them went bankrupt. A mortgage company will usually have a few mortgage brokers working in them.
It depends. There are three commonly used fee structures: fee-only, fee-based, and commission-based
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