Banker vs Wholesale Lender

Most potential homeowners are unaware that they currently, have 3 options when it comes to getting a home loan.

*If you do not want to read this (but it’s REALLY good), just scroll down to the 1 minute video at the bottom of the page.

While it might not be blatantly obvious to those outside of the mortgage industry, those that work within the industry share a common secret:  Wholesale lending will typically give the person looking for a home loan the best rates.  To the contrary, both correspondent and retail lending situations provide the most profit to the bankers.

Many homeowners make the mistake of turning to banks when it comes time to get a mortgage. For many, they are the most obvious choice, mainly because home loan services are usually offered at the customer’s primary banking institution.  But that does not mean it is the best option for the client.  Pricing with many mortgage brokers can be just as competitive as a bank and most of the times better. Wholesale rates, offered by wholesale mortgage brokers, can be substantially lower than retail interest rates you’ll get with banks and the ONLY WAY you can access wholesale rates is through a wholesale mortgage lender.


Examples – Wells Fargo, CHASE, B of A, Navy Federal Credit Union, US Bank, Union Bank, Everbank, Citibank, Comerica Bank, USE Credit Union.

There are banks that work directly with homeowners to provide financing on the retail level with retail rates.  Almost all have retail branches / offices with excessive overhead. One of the big misconceptions out there is that big banks are easier to deal with. That is not true; the bigger the bank is, the more bureaucracy you will have to deal with. That actually makes it harder for you to get a loan. Just because you bank there, DO NOT think they are giving you a good deal (especially Navy Fed, please call me if you bank with or are pre approved with Navy Fed). These lenders also do not have to disclose their commission to you, so you do not know how much they are actually making on your loan.


Examples – Prospect Mortgage, iMortgage, Movement Mortgage, CMG Financial, Guaranteed Rate, Amerifirst Financial, Point Mortgage, Prime Lending, New American Funding, Samuel Scott Financial Group, Greenpath Funding, Guild Mortgage, Skyline Financial, San Diego Funding, Home Services Lending, Drop Mortgage, Cross Country Mortgage.

These are mortgage bankers / direct lenders that work with homeowners to provide financing on the correspondent level. These lenders have branch offices (overhead to pay for) and offer their own retail/correspondent mortgage rates, mainly by using their own warehouse line of funding. They make a big deal of having this “in-house” capability to you, the client, and saying that they are able to maintain control of the loan and that’s a big plus.  But I can tell you from experience, it’s not that big of a deal and more often than not, they don’t have this “in-house”.  They might just have it at the corporate office and so they are saying it is “in-house” to you.  Also, they have more strict underwriting guidelines and A LOT less options than wholesale lenders do.

These are also the in-house lenders at most real estate companies.  Anyone who says they are a direct lender or mortgage banker typically fall into this category.  They do not have to disclose their commission, so you do not know if you are getting the best deal.  Also, did you know that the real estate office gets money when you use their in-house lender, even though it is a completely different company?  If your Realtor is directing you towards the in-house lender, be careful and talk to me and let’s compare rates and programs (but some Realtor’s don’t even know all of this, so they may not be to blame).

Also, when I found out how much money is actually made on a loan on the retail and correspondent sides, it became very clear to me that you, the client, is losing.  And that’s why their rates are higher, more money is made and more money is paid out per closed file.  At one correspondent lender I worked at, I counted 9 different people getting paid when I closed a loan.  That is just crazy.



Then there are wholesale mortgage lenders, who work as middlemen between the banks / investors and borrowers on the wholesale level to secure financing for homeowners.  That’s us. California’s largest wholesale mortgage lender.  With us, you have access to over 85 different lenders / investors which we shop for you. Let us find the best rate / loan combination for you and your particular situation, so you don’t have to spend all your time calling around trying to get “real” quotes from different banks.  Click here for more information on that

We also have access to the wholesale side of many of the above mentioned retail lenders and mortgage bankers (which means lower rates with us).  Many of these smaller investors sell pools of mortgage loans to the big retail banks mentioned above. For example, some of our investors sell loans directly to Wells Fargo. So, you are essentially getting a Wells Fargo loan on the wholesale side (Wells Fargo no longer does wholesale lending to wholesale brokers directly).  The same can be said for the other major FDIC banks mentioned above. It goes back to retail versus wholesale.  Also, as wholesale lenders, we DO have to disclose our commission to you and we can also show you the commission your bank would make on your loan if you went with them.


In conclusion, I hope that after reading this you now understand the differences and the options you have in mortgage lenders.  I would love the chance to earn your business on your next home loan.   See below for a sample of some of the banks / investors that we shop your loan at to find you the best rate / scenario for your situation.

Please let me know how I can help you.

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