A mortgage company, also known as an origination or underwriter, is a company engaged in the commercial business of originating and processing loans for residential or business real estate. A typical mortgage company is typically only the actual originator of the loan; however, it seeks funding from among a number of customer financial institutions who provide the funds and markets itself to prospective borrowers. This financing is referred to as “agg collateral” or “secured credit”. Mortgages are typically issued by private individuals or corporations and are secured by the real estate they are designed to cover.
The mortgage company bears a significant risk in regards to the loan process. A mortgage company works with some of the most financially unstable companies in the economy – these companies are oftentimes unstable and do not have a history of timely or accurate payments. If a loan originator bank fails to meet their contractual obligations to a customer during the course of financing, such failure can result in foreclosure and a loss of the underlying collateral (i.e., the house). In the United States, however, this situation is rarely the case because most mortgage companies originate and process loans through licensed banks and brokers who have the resources and legal authority to protect the loan and its borrower.
In order to ensure that the mortgage company that is ultimately securing the loan has the ability to meet their end of the deal, most banks and lenders require pre-approval for all loans. Most mortgage companies that originate and process loans will require collateral and will require written documentation of the full employment and financial background of the potential borrower. In the past, this was the only way to assure the bank of reliable funding and consistent payment; today, however, there are a number of online loan application services that provide the application process and documentation necessary to complete a mortgage loan application from the convenience of your home.
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