Category: Mortgage Broker

Mortgage Aggregators vs Mortgage Wholesalers

by

Herona Kim

Mortgage Aggregators

Mortgage aggregators belong to the secondary mortgage market. They purchase mortgages from various mortgage lending financial institutions and secure such mortgages with mortgage-backed securities (MBS). Mortgage aggregators get their profits by purchasing individual mortgages at much lower prices and selling such mortgages at substantially higher prices. In short, they assemble small products into large packages and sell them to a larger market. They charge appropriately for making this combination and presenting it as a package. Along with mortgage aggregators, dealer groups and franchise groups also act as wholesalers between mortgage brokers and lenders. All of them are termed as mortgage aggregators.

Majority of banks and other lenders have minimum volume requirements along with variance compliance requirements. Most of the average mortgage brokers would find it quite difficult to meet these requirements. Hence, they are forced to work with mortgage aggregators who offer not only easy access to banks and lenders but also provide various types of support that mortgage brokers might need, such as loan comparison software, customer record management, loan lodgment, management support, lending, generation of leads, sales and compliance training, and back office support. However, mortgage aggregators invariably charge a fee for such services, either in the form of retaining a percentage of commission from banks or lenders, a monthly fee, an annual fee, or a fee for each transaction.

Mortgage Wholesalers

Mortgage wholesales utilize average mortgage brokers as individual loan officers. They offer lower rates to the mortgage brokers and the broker would have to add necessary compensation while selling the mortgage loan to the client. This compensation rate would normally be equal to the rate that the client would obtain directly from a mortgage banker but this could vary from one broker to another and from one client to another, depending on the type of mortgage that the client seeks.

Mortgage Brokers

The advantage that mortgage brokers obtain when dealing with mortgage wholesalers is that the wholesaler would be able to repackage a mortgage loan that had been declined by a lender for some reason and present it to another lender. They achieve this by utilizing the concept of white label product, since mortgage managers and lenders have to offer similar products to remain competitive in the mortgage market. Even though minor differences might be present from one lender to another, the principle of white label product forces them to offer mortgage products that do not have much variance. Mortgage wholesalers utilize this to obtain mortgages to individuals in difficulty. Thus, the mortgage wholesalers offer valuable service to mortgage brokers.

Line of Finding

Since individual borrowers would find it difficult to obtain access to large mortgage banks or other mortgage lenders directly, they would be forced to go through a mortgage broker. In turn, the mortgage broker would be dealing either with a mortgage aggregator or with a mortgage wholesaler to reach the right lender. Hence, the line of funding becomes slightly complicated but all the parties involved in mortgage benefit from this kind of line of funding. However, the individual mortgage borrowers and the mortgage brokers might at times land up with greedy mortgage aggregators or mortgage wholesalers, resulting in higher rates for the borrowers and lesser profit for the brokers. Hence, borrowers and brokers should select mortgage aggregators or mortgage wholesalers carefully.

Copyright (c) 2013 Herona Kim

Mortgage Aggregators vs. Mortgage Wholesalers

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Article Source:

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Submitted by: Keith Junor

What Every Potential Real Estate Investor Should Know

If you truly want to become a real estate investor there are some basic skills you need to have or be able to get

Unlike any other kind of investment in real estate investing, you are responsible for the work required to make a return on your investment. Even if you have other people doing some of the tasks you still must know how to do them in order to tell someone else what and how to do it.

Some of the most important skills you must know are as follows:

Where to find the right properties.

Without them, there’s no money to be gained. Properties are the lifeblood of real estate investing. In order to be successful in this business you need to be able to find and evaluate properties to determine if they are good solid investments.

I am of course talking about bargain properties that meet your predetermined set of rules

A low price alone doesn’t mean it’s a good real estate investment. For some investors, terms are more important than just a low price ie: no money down, seller financing etc.

What about the condition? What it will cost to upgrade if necessary? What about the neighborhood or the economy in the area?

You’ll need to find out a lot more about each potential deal before you can say with certainty whether it’s a good investment or not.

Negotiating The deal

Now that you have found the right property for your portfolio it is time to start the negotiation. In order for this to be a good investment you must be able to make a profit now or in the near future. Mistakes at this stage will cost you in the end so you must negotiate the best deal for you by keeping in mind all the expenses and what can go wrong, and planning for most eventualities.

Read some books, take some courses or get a coach. It will save you a lot of time and money in the long run to get it right the first time. Do not Learn from my mistakes as that can be very costly.

Once you learn core negotiating skills, you’ll have the ability to go into a deal and work out the terms to create a win/win situation for everyone but especially for yourself

If you’re saving yourself time by working with a real estate investment firm, then the deal will have already been negotiated for you. This is a great way for the novice investor to get started because it helps minimize risks while they learn the business.

The many Ways To Invest in Real Estate

The goal is to get a lot more money out than was put in. This is known as leverage. In real estate investing, there’s quite a few ways to do this such as:

1. rehabs or

2. fix up and resell,

3. short sales,

4. foreclosures,

5. new construction

6. rentals

Decide which of these strategies you prefer to use and then learn as much as you can about them prior to even looking at properties. The more you understand the strategy or technique, the easier and safer it will be to start investing and making money from real estate investing.

Contracts

For the most part you want to learn how to create contracts that protect you and can be assigned to another party to close. This is known as a reassignment and is another way to make quick cash by flipping the contract to another investor for a fee.

There is an huge amount of information about investing in real estate out there in books, tapes, coaching groups, on the internet etc. so find it asap as the sooner you learn these key skills, the sooner you can start making money in real estate investing.

Be prepared , take your time and learn from legitimate sources and you to can be the next Donald Trump.

About the Author: Keith Junor is a Licensed Realtor and Mortgage Broker in Florida with 17 years experience. He authors a Blog at

The expertsinrealestate.com

that gives timely advice on buying and selling, credit repair, mortgages and foreclosure. He can be reached at

kj1010@bellsouth.net

Source:

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