In Types of Mortgage Lenders – Mortgage Bankers and Mortgage Brokers, mortgage expert witness Robert Trombley writes:
The types of mortgage lenders include mortgage bankers, commercial banks, credit unions, and thrift institutions (savings banks and savings & loan associations). Banks, savings & loans and credit unions gather funds from their customers through checking and savings accounts and certificates of deposits. These funds are then used to make loans. When these institutions make a mortgage loan, they may decide to hold it in portfolio or sell it to secondary market investors.
Mortgage bankers get their funds typically by selling their loans in the secondary mortgage market. Since mortgage bankers primarily have one focus of business – to make mortgage loans – they usually offer very attractive loan programs and rates.