Wholesale Lending and Why it’s Important!

Key takeaways:

  • A wholesale mortgage lender is an institution that funds mortgages and offers them to third parties, such as a mortgage broker, bank, or credit union
  • Non-bank lending accounts for about half of all U.S. mortgage origination
  • Wholesale mortgage lending differs from other mortgage options in that it requires the borrower to work with a mortgage broker instead of the lender
  • Wholesale lenders can offer cheaper rates and more relaxed eligibility guidelines compared to traditional lenders 
  • America Mortgages is the only U.S. mortgage broker outside the U.S. that focuses 100% of their business on Foreign Nationals and Expats living overseas

Wholesale Lending, Mortgage Brokers.... and Why It’s Important for International Clients 

The concept of wholesale lending is not understood outside the U.S. but actually accounts for about half of all mortgage origination in the U.S. 

One way to think about a wholesale lender is a bank that does not take customer deposits and only buys and sells mortgages.

A research article by The Ascent highlights the presence of non-bank financial institutions as the top three largest mortgage lenders in the U.S.

According to The Ascent's analysis of the top 25 mortgage lenders, 72% are independent mortgage companies, and 28% are banks!

Thanks to a regulation called Dodd-Frank after the financial crisis, retail banks only focused on “Prime” borrowers since these mortgages eventually would be sold to Fannie Mae, a government-linked entity providing liquidity to the mortgage market.

Prime borrowers are U.S. citizens with very good U.S. credit who hold high-earning, long-tenured, salaried jobs and borrow for their primary residence. Nearly all other types of borrowers fall under wholesale mortgages.

This includes our clients => international borrowers, both foreign nationals and overseas expats!

The Customer Journey

Whether it's a purchase loan or a refinance - retail lenders work directly with individual borrowers, while wholesale mortgage lenders don’t. 

Instead, they partner with mortgage brokers, who work with you to find the right loan — often at a discounted rate — and prepare your application.

America Mortgages => The world’s only U.S. mortgage broker with a 100% focus on Foreign Nationals and U.S. Expats!

What is a wholesale mortgage lender?

A wholesale mortgage lender is an institution that funds mortgages and offers them to third parties, such as a bank, credit union, mortgage broker, independent mortgage company, or professional.

How wholesale lending works

In wholesale lending, the borrower doesn’t have direct contact with the lender; instead, the borrower interacts with the third-party mortgage broker, who is responsible for facilitating the loan origination and application process and communicating throughout the lender’s underwriting. The mortgage broker works for the clients, and not just one bank or wholesale lender. This gives the clients more options of loan programs and qualifications.   

A wholesale lender lets mortgage brokers know what the loan options and terms are, and the third party then matches borrowers with an appropriate loan.

Once the loans close, wholesale lenders typically sell them in the secondary mortgage market to free up capital to fund more mortgages.

When working with America Mortgages, you gain access to our extensive network of over 50 wholesale lenders and will have access to competitive rates and more flexible loan options and requirements.

If you're seeking the best mortgage rates and expert guidance through the lending process, opting for the broker and wholesale lender route is your best choice. 

America Mortgage's sole focus is on overseas borrowers and we have the knowledge and experience to meet your specific needs. This is all we do!

The role of mortgage brokers in wholesale lending

You’ll work with our international-based loan officers to complete each step in the application process. Once your application is ready for review, we will coordinate with the wholesale lender’s underwriting team for a pre-approval in 72 hours.

You can then use the pre-approval to show proof of financing when you start house-hunting.

Our job as a mortgage broker doesn’t stop with assisting the prospective borrower with their mortgage application. 

We will also work to find you the best deal on a mortgage. Since we will have access to loan programs specifically designed for overseas borrowers, you will be able to secure more competitive rates and terms than you would if shopping for a home loan independently.

More importantly, since we understand the requirements of foreign borrowers significantly better than any U.S.-based mortgage broker, our team will be more effective and efficient in guiding you through the entire loan process.

Wholesale mortgage lending process

Below is an overview of what to expect if you decide to work with one of our internationally-based U.S. loan officers:

  • Step 1: Connect with our International Loan Officers to complete a standard loan application 1003 and gather documentation the wholesale lender needs to make a decision
  • Step 2: The mortgage broker confirms your application is complete and submits it to the wholesale lender for review
  • Step 3: Upon receipt, a member of the wholesale lender’s underwriting team analyzes your loan application, along with the supporting documentation, and verifies the entries to make a lending decision
  • Step 4: Once your application is approved, the mortgage broker provides you with a commitment letter from the wholesale lender detailing the loan terms and any applicable conditions
  • Step 5: The mortgage broker coordinates with the wholesale lender to close and fund your home loan. If there are any conditions the borrower must satisfy for the loan to close, the mortgage broker notifies the borrower during this step
  • Step 6: Once all conditions are met, the wholesale lender issues the “clear to close” to the mortgage broker, and the broker notifies the borrower. The borrower sends their down payment and the funds for closing costs to the title company shortly before closing
  • Step 7: At closing, the borrower signs the loan documents at the local embassy to finalize their end of the transaction and mails the documents to the title company
  • Step 8: The wholesale lender closes and funds the home loan

Key points of wholesale mortgage lending

  • A mortgage broker will search for the best loan option from a network of wholesale lenders
  • Less stringent eligibility guidelines
  • Potentially access more competitive rates and flexible loan terms
  • Personalized support from a mortgage broker
  • No direct contact with the lender
  • Mortgage broker fees  
  • Higher likelihood of loan sell-off following closing

Is wholesale mortgage lending right for you?

Getting a mortgage from America Mortgages is your only choice outside the U.S. if you are a non-resident foreign national or overseas expat looking to purchase an investment property or second home. 

A U.S.-based mortgage brokers WILL NOT know the ins-and-outs of borrowers living overseas, but THIS IS ALL WE DO - and we are in your time zone and speak your language!

Here are our popular U.S. loan programs

In conclusion, understanding the dynamics of wholesale mortgage lending is crucial for international clients, especially non-resident foreign nationals and overseas expats.

At America Mortgages, we navigate this landscape with over 50 established relationships with wholesale lenders, offering you access to competitive rates and flexible loan options.

If you're seeking the best mortgage rate and a guided lending process tailored to your international needs, reach out to us today to take the first step toward securing your U.S. property with confidence.