Wholesale Lender
Author: Terri Ewing
Published: July 29, 2008
Wholesale Lender Defined
A wholesale lender provides the money for a brokered mortgage at closing. They also underwrite the mortgage and make sure it has all the required documents and is within the guidelines. A wholesale lender is in between the originator and the final investor.
They produce rate sheets for retail originators to price from. Brokered loans can be originated by mortgage brokers or banks can broker loans they don’t want to fund themselves.
More often the term wholesale lender is used then talking about brokered loan originated by actual mortgage brokers. Brokers and the wholesale lenders they use are not affiliated with each other…they are different companies.
A wholesale lender makes money by charging fees and by making a spread off the rate when they sell the loan to the final investor. The fees they charge are things like underwriting, tax service fee, document preparation, etc. The rate sheets they produce have their profit built in. When the bundles of mortgages are sold, the final investor pays them the spread on the rate called service release premium.
Author: Terri Ewing
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