Can traditional Mortgage lenders find Out of state deals?

[Suresh Kannan]

Iam curious about this, currently the properties I got were funded by a local (Tx) mortgage lender. I have heard people getting funding from credit unions out of state to buy in a different state? Is it possible and is it specific to different states? If someone can educate me, on how it works, would really appreciate it!!!

[Chris Mason]

Originally posted by @Suresh Kannan:

Iam curious about this, currently the properties I got were funded by a local (Tx) mortgage lender. I have heard people getting funding from credit unions out of state to buy in a different state? Is it possible and is it specific to different states? If someone can educate me, on how it works, would really appreciate it!!!

 Loan originators at depository institutions (big banks, credit unions, where you can "deposit" funds into a checking account) take no coursework, pass no test, and do not have a license. They are registered (if you see NMLSR, that's what the R is, registered), and that registration is good nationwide (or, more accurately, wherever the depository is authorized to do business).

Loan originators at mortgage banks, as well as loan originators that are mortgage brokers, have to complete coursework and pass a test to get a license, and it's a state specific license. On the East Coast and in the South, it's common for one person to have licenses for multiple states. In California, it's more common for us (myself included) just to have a license for one state. Here in the Bay Area it's common for us to serve the entire state, but in some areas like Los Angeles, the loan originators often elect to only work within that one county. 

So the pro of the nationwide lender at a bank or credit  union is that if you haven't dialed down on which state you are buying in, that can make sense. The con is that with no licensing, test passing, or continuing education, there may be a competence tradeoff, and they only work with that one bank so while you have state optionality, you lose some financing optionality.