When people buy a home, they usually don’t have enough money to pay for the entire property up front all at once. Instead, they will usually have to obtain some type of loan that will help them finance the property through smaller payments spread out over time.

Generally, a mortgage is a type of legal document that you sign when purchasing a home. It gives the lender the right to take possession of the property if you fail to repay the loan according to the promised terms. 

Mortgages are sometimes called by other names, such as a deed of trust. They help people purchase property and home, as well as refinancing options for the current property owner. When the purchase transaction occurs, the mortgage is usually filed in the county records. 

What is a Mortgage Lender?

A mortgage lender is an individual or company (such as a bank or other institution) that loans money in exchange for an interest in residential or commercial real estate. The lender can provide more than just real estate loans to homeowners or potential home buyers. A mortgage lender can also offer other types of products connected to loans. 

Mortgage bankers are also sometimes referred to as mortgage lenders. They typically originate their mortgage loans and sell them in bundles to secondary markets and to public and private investors.

Are There Different Types of Mortgage Lenders?

Yes. Different types of mortgage lenders can include:

  • Portfolio Mortgage Lenders: These types of mortgage lenders also originate their own mortgage loans. They may service, or keep their own loans or loan products. After the property owner pays on the loan for about a year, it is considered a “seasoned” loan. 
    • After this point, it can be sold to private or public investors on the secondary market for a profit. 
    • Unlike traditional mortgage lenders, portfolio lenders offer more loan program options and flexible loan products, since the loan will be used in different ways than a traditional mortgage loan.
  • Correspondent Mortgage Lenders: This type of lender originates and funds mortgage loans under its own particular name. Correspondent mortgage lenders also sell the loans to larger lenders, who may then turn around and sell them to private and public investors. 
    • The terms of the agreement are typically based on terms that are approved by the larger lender.
  • Subprime Mortgage Lenders: These mortgage lenders focus on people with less than perfect credit or a basic inability to purchase a home. They may offer loans at different rates or approval requirements to make it easier to secure the loan. 
    • However, these types of lenders and loan products may be associated with various risks.
  • Alt-A Mortgage Lenders: This kind of lender offers mortgages to certain individuals with limited income documentation, credit scores under 720, and little to no down payment. 
    • As with subprime lenders, these types of transactions and loans may be associated with various risks and drawbacks.

Thus, there may be different types of mortgage lenders and loan products. These may be beneficial to some people, depending on their needs, requirements, and financial aims. For instance, a person who is interested in purchasing a home for living in may simply require a traditional mortgage lender. 

On the other hand, a person who is interested in purchasing a home as an investment opportunity may be more interested in working with a portfolio mortgage lender, who can help them turn a profit on the property transaction. 

The selection of mortgage type and mortgage lender to work with all depends on the person’s goals and aims. What is beneficial for one borrower might work against another person. 

What are Some Common Disputes with Mortgage Lender?

As with most other financial transactions and dealings, one of the most common disputes associated with mortgage lenders is that of fraud. Mortgage fraud can occur in various ways and can involve many different aspects of the property, as well as various schemes and mechanisms for accomplishing the fraud. 

For instance, a common example of mortgage fraud is appraisal fraud. This is where there is fraud involved in the way that the value of the property is estimated or calculated. This can lead to skewed figures or representations of the property value. In turn, this can make the transaction beneficial for the lender, while causing losses for the borrower. 

Mortgage fraud can largely be prevented by taking precautions when dealing with a mortgage lender. Be sure to review all documents and loan terms very carefully before you sign anything. You should also do some research into the lender’s background and credentials, to ensure that they are properly licensed, trained, and educated. 

Working with a lawyer can also prevent fraud, as a lawyer can help you draft and review various loan terms. 

Should I Hire a Lawyer for Help with Mortgage Lender Issues?

Acquiring a mortgage generally requires legal assistance to ensure the process goes smoothly. You should talk to a real estate lawyer in your area if you have any questions about mortgage lenders and any disputes with lenders. Your attorney can provide legal guidance and advice to help ensure that your rights and interests are protected.