What is the difference between a bank and a mortgage lender?

The key difference between a bank and a mortgage lender is how they fund loans. Banks use deposits from customers, while mortgage lenders use outside sources such as private investors or other banks. Banks also typically offer more services such as checking and savings accounts, debit and credit cards, insurance and investments. Mortgage lenders, on the other hand, often just focus on residential mortgage loans. In California, banks must be authorized and regulated by the Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC). Banks must also follow California banking laws, including the Fair Credit Reporting Act, the Fair Lending Act, and the Truth in Lending Act. Mortgage lenders, on the other hand, must be licensed by the California Department of Business Oversight (DBO). Further, they must follow certain requirements, such as the Mortgage Lender Law, which requires them to set up a system of record-keeping and reporting to the DBO. For consumers, it is important to understand the differences between banks and mortgage lenders in order to make an informed decision when choosing a lender. Banks may offer a wider range of services, so they may be more suitable for customers looking for a full-service financial institution. Mortgage lenders may be more suitable for customers who are just looking to obtain a mortgage loan.

Related FAQs

What is the Real Estate Settlement Procedures Act?
What is the Fair Debt Collection Practices Act?
What laws protect personal banking information?
What is the Home Affordable Foreclosure Alternatives Program?
What is the Consumer Financial Protection Bureau?
What is the Monetary Control Act?
What are some common banking laws?
What is the Alternative Mortgage Transaction Parity Act?
What are the rules and regulations related to consumer banking?
What is usury?

What is the difference between a bank and a mortgage lender?

Related FAQs

Related Blog Posts