Hey Kevin, thanks for the thoughtful response - that was incredibly helpful. You asked above what questions I have - thanks in advance, here's some questions after reading your description:
- For the underwriting of the loans, let me play back to you what you wrote to make sure I got it right. For the majority of loans, you determine loan eligibility and terms (based on an industry standard set of rules - Fannie Mae / Freddie Mac / FHA / USDA / VA as well as the investors guidelines you mentioned below. That's how the final investor knows to trust the underwriting). The correspondent lenders are "partner lenders" you work with on the loans you don't have the capability to underwrite. So they evaluate for you if it's a good loan, then you fund the loan. And then the same investor that underwrote it for you also services the loan. The reason the correspondent lender couldn't just issue the loan is b/c they lack the credit to do so, if I got that all right?
- In terms of pricing, I heard that mortgage bankers operate using "rate charts" that are built for each specific mortgage banker based in part on their past performance (e.g. default rates). So if a consumer works with a more reputable mortgage banker, the consumer will get a better rate because their rate chart with their investor will be better - is that true?
- You mentioned that investors publish rates daily, where can a consumer go to find those? I think that answers my question above! Then I assume the pricing to me, the consumer, is that rate + a bit for spread + some commission to salesperson.
Thanks so much, Kevin!
