To continue the discussion about mortgages from the previous blog post, Steve Nimmer, Coldwell Banker Mortgage (912-604-3834 NMLS #: 186680) emailed me more information.
What happens behind the scenes after closing?
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga
What happens behind the scenes after closing?
- Warehousing: About 10 days after closing, the lender uses their warehouse line to finance the new loan until it is "sold" to an investor on the secondary market.
- Secondary market: Allows lenders to sell mortgages to investors, providing them with new funds to offer home loans to new borrowers. Your customers' mortgage rates are influenced by the yields demanded by these investors.
Typical investors of mortgage-backed securities in the secondary market include:
- Fannie Mae and Freddie Mac for conventional loans
- Ginnie Mae for FHA and VA loans
- Insurance companies, pension funds and private investors
- Shipping and delivery: Once an investor is secured, the loan is packaged with other loans and applicable documentation and becomes part of a mortgage-backed security (MBS). These mortgage-backed securities are then delivered to the investor.
- Loan administration/servicing: A loan servicer takes care of the administrative duties once the mortgage-backed securities are delivered to the investor. This includes: customer support, collection of mortgage payments, management of escrow accounts and fund recovery efforts.
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga
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