AgentMortgage

Why do most lenders sell their mortgages?

Some disagree with the practice, but there are benefits

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"Why do most home mortgage lenders sell their mortgages instead of keeping them? I have a problem with negotiating my mortgage deal with one firm over a week, then having my loan sold to another firm that I did not select, and with whom I am obliged to deal for as long as 30 years. Is it possible for me to find a lender who will promise not to sell my loan?" Mortgage lenders comprise two very different types of institution. The largest number are mortgage companies, or as they prefer to be called, mortgage banks. Mortgage banks are state-chartered temporary lenders who must sell the loans they originate because they do not have the long-term funding needed to hold them permanently. Mortgage banks borrow large amounts, but only for the short periods they must hold mortgages prior to their sale. The unsold mortgages serve as collateral for these loans. As the mortgages are sold, the loans are repaid. Mortgage bankers need very little capital because they have exce...