A mortgage company is a firm engaged in the business of originating and/or funding mortgages for residential or commercial property. A mortgage company is often just the originator of a loan; it markets itself to potential borrowers and seeks funding from one of several client financial institutions that provide the capital for the mortgage itself.
That, in part, is why many mortgage companies went bankrupt during the subprime mortgage crisis of 2007-2008. Because they weren’t funding most of the loans, they had few assets of their own, and when the housing markets dried up, their cash flows quickly evaporated.
The Equal Credit Opportunity Act prohibits credit discrimination based on age, race, color, religion, national origin, gender, marital status or because you get public assistance. It’s also illegal for lenders to discourage you from applying or to impose different terms or conditions because of these factors.
Finally, it prohibits lenders lenders from denying mortgages to retirees if all standard criteria are met—things like your credit score, the size of your down payment, your liquid assets, and your debt-to-income ratio. Although it is unclear how long the trend will continue, positive economic data indicates that for the immediate future homebuyers can continue to benefit from low mortgage interest rates.
Three Key Mortgage Companies
Here are three of the key national players in the mortgage scene.
Wells Fargo & Company
San Francisco-based Wells Fargo (WFC) is an internationally recognized name in the mortgage industry, despite that in 2018, it had to pay over 2 billion dollars in penalties to settle with the U.S. Justice Department. The Wall Street Journal reported that this fine was «over the sale of toxic mortgage-backed securities in the lead-up to the financial crisis.»
Even though, Wells Fargo & Co., struggled under the weight of the investigation dating back to over a decade ago, it remains a solid player in the mortgage industry.
Wells Fargo offers the usual menu of mortgage products—fixed-rate, adjustable-rate, FHA, VA, military, jumbos, refinance, and home equity lines of credit (HELOCs)—as well as nonconforming loans with special features for purchasers of high-value properties.
For example, WFC’s jumbo loans feature flexible buydown options that allow customers to make lower payments during the early years of a mortgage. Other products allow customers to combine their mortgages with home-equity loans. Its online platform was upgraded recently to improve its processing capabilities, and you can now apply and track your loan application online from your computer, smartphone or tablet.
The company’s website has a substantial amount of educational material to help you learn about your mortgage options, plus you can compare rates and loan options, and calculate your payments. Even though much of the application is done online, they do offer a home mortgage consultant to help you through the process.
Bank of America Corporation
Bank of America (BAC) is known for its creative ways of marketing new mortgage products. For example, in May 2019, the company announced a new, but limited program of offering mortgages without origination fees. In addition, Bank of American also offers the “Affordable Loan Solution mortgage,” which is a fixed-rate loan for low- and moderate-income borrowers, according to the company. With this mortgage, Bank of America looks beyond traditional credit scoring methods to assess applicants who demonstrate responsibility based on other criteria such as rent and gym payment history.
As compared to FHA 3.5% loans, Bank of America’s version of the product does not require borrowers to pay for private mortgage insurance. Bank of America did a brisk $46.6 billion in home loans over a year ago, putting it in the top 10 list of largest mortgage lenders.
Mr. Cooper Group Inc.
Mr. Cooper (formerly Nationstar Mortgage Holdings, Inc.) is a mortgage loan originator and servicer, based in Coppell, Texas. According to the company it has approximately 8,500 employees and is one of the largest non-bank lenders in the United States. As of 2019, according to the company website it has 3.8 million customers and originated 21.8 billion in loans.
The lender offers borrowers a diverse array of mortgage product options including FHA, VA and Fannie Mae, USDA, and jumbo loans. It offers also offers mortgage holders a rewards credit card that allows them to apply points to their principal.
Among the brick-and-mortar institutions, one that often gets cited is TD Bank, which offers a number of mortgage products including fixed-rate, adjustable-rate, jumbos and government loans, plus its own TD Right Step Mortgage for buyers who meet low- to-moderate income requirements (or if the property you’re purchasing is in a low- to-moderate income area). To get prequalified, you can call a TD Bank mortgage advisor or visit a TD Bank near you (many have extended hours and are open on Saturdays and Sundays).
You will need a signed purchase and sale agreement to start your application, and once it’s submitted, TD Bank says it will get back to you with next steps within 24 hours, and will have a loan estimate of your closing costs within three business days of your submitting an application.