Mortgage Banker Role

I was surprised that David W. Myers, always a dependable authority, would define a mortgage banker (“Learning the Lingo,” April 1) as he did. Myers was all wrong in his definition.

He wrote that “A company that provides loans with its own funds. . . .”

Mortgage bankers are local firms that place loans for investors, not for themselves. Historically, many of these investors have been large financial institutions, often on the East Coast, financial centers. Mortgage bankers place the loans and service them, although sometimes servicing is “released” or sold to other firms. (Servicing, in plain language, means collecting the borrower’s periodic payments and channeling these to the lending institution.)

RAY CONNORS

Laguna Niguel

Connors is honorary life member and public relations counsel emeritus of the California Mortgage Bankers Assn.

Editor’s note: The California Real Estate Financial Handbook published by Financial Publishing Co. in cooperation with the California Assn. of Realtors states that a mortgage banker is a “company providing mortgage financing with its own funds.” But it also points out that “although the mortgage banker uses its own funds, these funds are generally borrowed and the financing is either short-term or, if long-term, the mortgages are sold to investors.”