These days mortgage institutions have become very popular but during the olden days incase if anyone wanted to have a home loan then they would just walk down looking in for a near by bank or savings and loan. Then in such a case if the bank had some of the extra funding then what they would do is that if they consider you as a good credit risk then in such a case they would lend you money from their own resources. But these days this is not the case anymore, majority of the money lending is done from the three major places or in other words three major mortgage institutions called as
• Fannie Mae (FNMA- Federal National Mortgage Association)
• Freddie Mac (FHLMC- Federal Home loan Mortgage Corporation)
• Ginnie Mae (GNMA General National mortgage Association)
But these days the system through which it works has completely changed, these days you need to talk to any of the lenders and then apply for a loan and after this all the proceedings are undertaken after which you would potentially become the owner of a home loan and in turn you would be entitled to pay all the mortgage payments. It is quite obvious that you need to pay the payments to the company who arranged your mortgage loan or to the company to whom your mortgage loan might have been transferred to some another institution. That is another fact that the company to whom you pay the mortgage payments will rarely be the actual owner of your loan. They are the people who are referred to as the servicer of the mortgage loan. They are called as the servicer because they are the ones who service your loan from the institution who owns the actual loan.
Have you ever seen behind the scenes of the institutions and they package the loans into a pool with a lot of other loans and then they are sold to the any of the above institutions which are mentioned above. The so called servicer of the loans is given a monthly loan fee by the investors of the loan so that the servicers of the loans are required to process payments and take care of the loans which the investors render. This monthly fee is nothing but three-eights of a percent of the loan, it is to be noted that the amount keeps on adding. There are many companies that function the loans of amount which is over billions of dollars worth home loans. However we understand the fact we come to know that three eights of a billion incomes is a very meager amount and hence this tiny income is required to be made little larger than what is it at present.
But to understand to the fact that mortgage lending is the real place wherein there is actual large amount of income earning. The entire system which is so designed has been designed with a view that all the mortgage intermediaries get the loan amount which is at a break even level. As the loan is packaged into the pools of Fannie Mae, Freddie Mac, or Ginnie Mae, lender gets the additional funds so that he can make more loans and even sell to the different institutions.
