What is one key difference between mortgage bankers and mortgage brokers?

Mortgage bankers do not have depositors, which distinguishes them from traditional banks and savings institutions. Instead, they typically use the capital from investors to fund mortgage loans. Once the loans are secured, mortgage bankers can sell these loans on the secondary market, creating liquidity to fund new loans. This structure enables mortgage bankers to have a more flexible approach in dealing with a variety of loan products.

On the other hand, mortgage brokers act as intermediaries between borrowers and lenders, facilitating the loan arranging process without using their own funds for lending. Mortgage brokers do not fund loans directly but are instead crucial in connecting consumers with lenders who will underwrite loans. As such, they are primarily focused on finding the best mortgage options for their clients rather than taking on loan origination risk. This clear distinction highlights the operational differences between mortgage bankers and brokers in the real estate finance market.