A mortgage banker is an employee of a bank who has been moved into mortgage lending. A bank will usually have a mortgage loan officer available in order to provide this service to their customers. A mortgage employee is assigned a nationwide mortgage licensing number, but does not have to pass a licensing test for their number. A mortgage banker is not required by law to disclose the amount of money they will be making by closing your loan. Mortgage bankers typically fund the loan with their own money and then sell the loan to an investor after the loan closes.
A mortgage broker is required to obtain licensing through the Nationwide Mortgage Licensing System by taking a very strict exam testing them in their knowledge of the mortgage loan process and regulations. They are also required to renew this license every year by providing proof they have had the minimum of eight hours of continuing education and a yearly renewal exam. The mortgage broker is required by law to disclose the exact amount they will make on your loan along with the exact credit you will receive when you lock in your interest rate. Mortgage brokers typically fund the loan through the investor’s money and have access to a wide array of investors.
This is beneficial in getting a loan approved since a mortgage broker has several companies’ underwriters to use as a resource instead of just one or two as typically seen in a mortgage banker situation.