Servicing debt and portfolio lending.

[Jameson Sullivan]

Is a bank that does portfolio lending considered to service their own debt and one that sells their mortgages off to Fannie is not?

I see the benefits of a local portfolio lender all the way so Ive been calling around looking for a local bank that does portfolio lending around me and most of them just flat out say "no, we sell off our debts to fannie and freddy"

One woman told me "Yes we do portfolio lending, but we dont service our own debt" Thats where I got confused cause I was under the impression that they meant the same thing. anyways, as always Id love some input.... Also is it even that big of a deal to find a portfolio lender for my first 1, 2 or 3 deals or is the fannie loan at 3.75 percent gonna be just fine? Thanks

Jameson Sullivan

[Chris Mason]

A portfolio lender can retain ownership, but subcontract the servicing. Just like a landlord can delegate responsibilities to a property management company.