Mortgage Bank Defined

A mortgage bank is a retail mortgage originator that sells loans directly to the public and funds those loans with their own money. Unlike a mortgage broker who also sells loans directly to the public but must use the funds of a wholesale lender to close, a mortgage bank uses its own money for closing.

Wells Fargo Mortgage is a subsidiary of a Federally chartered depositor bank which merged with Norwest Bank in 1998 an has become the second largest mortgage originator.

Wells Fargo Mortgage is part of the $40 Billion Wells Fargo Bank mega-company that once again has been a darling of stock brokers and mutual fund managers for over two decades. It is no accident Wells Fargo has had incredible stock price appreciation mainly due to their mortgage operation.

Washington Mutual Mortgage along with eAppraiseIT, their appraisal firm, was accused of over inflating the appraisal values of homes by New York’s attorney general, Andrew Cuomo.

Washington Mutual Mortgage allegedly colluded with eAppraiseIT, an appraisal management subsidiary of First American Corp. to “meet the numbers”. The lawsuit said that eAppraiseIT succumbed to pressure from Washington Mutual Mortgage to use appraisers who overvalued homes allowing the bank to close more home loans.

Mortgage banking behemoths Wells Fargo and Countrywide Home Loans are dealing with ongoing and more recent charges of predatory lending. Predatory lending is a moniker usually reserved for the most egregious examples of unscrupulous lending behavior. The consumer groups ACORN and NACA are recently shining the light on what mortgage brokers like myself have known for a very long time…