The lender is the one who provides the money to the borrower at the closing table. In exchange, the lender receives a note evidencing the borrowers debt and obligation to repay, plus a lien on the subject property. Mortgage brokers do not lend. They are independent contractors who offer the loan products of multiple lenders, called wholesalers. They also counsel on any problems involved in qualifying for a loan, including credit problems, take the borrowers application, and usually process the loan. Processing includes compiling the file of information about the transaction, including the credit report, appraisal, verification of employment and assets, and so on. When the file is complete, it is handed off to the lender, who funds the loan. Many large lenders have both retail and wholesale divisions. Loan officers are employees of lenders or mortgage brokers. Loan officers find, sell and counsel customers, and take applications. Loan officers employed by mortgage brokers may also be involved in loan processing. While loan officers are employees, they act more like independent contractors. They are compensated largely, if not entirely, on a commission basis. Both lenders and mortgage brokers post prices with loan officers to be offered to consumers. The loan officers usually have limited discretion to reduce the price if necessary to meet competition, and full discretion to raise the price if they can. Reasonably astute shoppers will probably do better dealing with a mortgage broker than with a lender.

Because mortgage brokers deal with multiple lenders, they can shop for the best terms available on any given day. In addition, they can find the lenders who specialize in various market niches that many other lenders avoid, such as loans to applicants with poor credit ratings. On the other hand, the risk of encountering a rogue who will trick you into paying more than you should is higher among mortgage brokers than among lenders. Mortgage banks now dominate the US market. Of the 10 largest lenders last year, 9 were mortgage banks and only one was a portfolio lender. However, many of the large mortgage banks, such as Chase Manhattan Mortgage and Wells Fargo Mortgage, are affiliated with large commercial banks. Portfolio lenders include commercial banks, savings banks, savings and loan associations, and credit unions. Deposits provide a relatively stable funding source that allows these institutions to hold loans permanently in their portfolios.

Washington Mutual, a savings bank, is the only depository on the list of the 10 largest mortgage lenders.

Wells Fargo Home Mortgage and Wachovia Mortgage. Great rates, minimal paperwork, intelligent banking staff. Contact a major mortgage lender such as Countrywide or Wells Fargo who specializes is subprime mortgages.

Rates may be slighlty higher, but that is okay as long as you can afford the payment. Of course, the seller would have to agree to this. Typically, the sale price increases if a seller assistance is involved. Also check first time homebuyer loans, FHA loans and other avenues for minimal downpayment loans.